Wise Money markets subdued as focus turns to ECB, BOE meetings

The wise money markets are pretty subdued in the new year as US Stocks fell for second consecutive day.Wise Money markets subdued as focus turns to ECB, BOE meetingsMost investors are keeping a close watch on the expected fourth-quarter earnings report.

With the fiscal cliff negotiations having been drawn to a decision, we are getting back into the same mode that we were before the spotlight fell on the US to sort the fiscal cliff. USD is coming back into strength against all currency pairs, barring the Japanese Yen, in trading yesterday.

In news emanating from Europe overnight, economic confidence figures seemed to provide rather subdued cheer in December as retail sales figures were disappointing coupled with the unemployment rate which rose to a record 11.8% in November.

This has increased speculation and brought about uncertainty surrounding the Eurozone which continues to be slotted in for another recession.

The currency hit a low of 1.3055 against the Greenback, as compared to trading last week from 1.3280 levels.

Most of the focus for the struggling debt ridden region is moved to when the IMF will meet on Jan 16 to discuss the next loan tranche to Greece.

Markets will also keep a close watch over next week’s European Central Bank and the Bank of England meeting.

However, it is most likely with the current scenario that they will continue with their current monetary policies, as further quantitative easing does not seem likely to be implemented, nor interest rates amended.

From the UK, Sterling continues to take its trading cues from the EUR/USD pair, and has moved down from 1.63 levels last week all the way back to 1.6050 in early trade this morning.

In spite of Britain’s trade deficit which marginally narrowed in November, it has failed to move much above these levels.

However, with rising inflation and weak economic fundamentals most of the current strength against most currency pairs is unlikely to last for a while, as Sterling weakness will be exposed by better global sentiment

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