The pound is mixed this morning, gaining against the broadly weaker dollar, but consolidating versus the euro on Greek debit talk progress. Sterling came under pressure yesterday after BRC report showed that sales at British stores, opened at least one year, fell by 0.3% from a year earlier, making it second worst reading since the records started in 1995. Recent economic data indicates that UK economy is faltering, therefore it is widely expected for the Bank of England to increase its asset purchase program to 325 billion pounds at their meeting on Thursday. The MPC (Monetary Policy Committee) raised the QE program to 275 billion pounds at October meeting, and latest round of buying ended by February 02. With empty economic calendar scheduled for today, expect for the pound to remain driven by market risk aversion before BoE announce its decision on tomorrow’s meeting.
The euro gained across the board during the overnight session as Greek Government is making progress on measures needed to win the second round of international aid. Greek PM Lucas Papademos will meet the heads of three political parties in Athens in order to win further budget cuts as required by EU, ECB and IMF. Looking ahead to today, German trade balance figures headline the economic calendar, with the expectation for the numbers to have narrowed in December. Expect for the euro to remain supported versus major rivals, driven by encouraging news from Greece and before ECB meets in Frankfurt tomorrow.
Comments