rate announcements here we come

Rate announcements here we come….

Despite the fact we are heading into the Bank of England’s rate decision tomorrow Sterling is holding up pretty well. There is no doubt Sterling has a lot of in built bad news already in the price and a 0.5 % base rate cut is already priced in some may even argue that 1%  is already accounted  for. On the other hand the ECB still stubbornly refuse to move their interest rate down from 2% and tomorrow we expect unchanged. Short term GBP EURO could move lower on the back of the widening interest rate differentials, however the continuing downgrading of Euro Zone growth forecasts can only mean further pressure on the Euro and Sterling could be the main benefactor of this.

In the US the Obama effect looks like it could be running out of steam and the US$ will come under pressure as the Treasury struggles with its exploding balance sheet. The short term rally we saw in the Australian Dollar has also fizzled out as the market comes to terms with what could be a protracted slowdown down under especially as the price of commodities continues to fall.

And over to Russia the fun continues as the Central Bank desperately tries to hold up a freefalling Rouble, a thankless task and this is also putting pressure on Poland and Hungary as their currencies get drawn into the global risk aversion play and continue to fall…

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.