Wise money markets await Central Bank Decisions

Sterling had a favourable start to the week against Euro and US Dollar last week with all gains largely reversed on the release of a flurry of negative news from the U.K. on Friday.Wise money markets await Central Bank DecisionsManufacturing actually contracted against expectations of a small growth with mortgage approvals and lending both falling also.

We then saw positive ISM Manufacturing and Michigan Consumer Sentiment giving an afternoon boost to the US Dollar after lacklustre Friday.

We saw the GB Pound/US Dollar hit the 1.49’s on Friday with GBP/EUR flirting with 1.16 and EUR/USD struggling to stay above 1.30 as it dipped to 1.29’s later in the week.

In the US of A there has been a quiet start to the week, data wise, for USD before Friday’s Non-Farm Payroll figure will focus the attention on the US, which has been benefiting from its safe haven status as volatility from the problems raging in Italy and Spain and poor performance of Sterling continue to help the currency strengthen.

Friday’s release will be closely monitored after large spending cuts were not prevented last week which the Obama administration has said could cost hundreds of thousands of jobs.

Thursday’s interest rate decision will be the most volatile time for Sterling with interest rates expected to remain on hold although voting has showed last month that further QE could be around the corner.

It is thought the negative interest rate decision could be mentioned in the press conference with Sir Mervyn King after the decision.

 The euro will try and shake of the hangover from the lingering Italian Election this as it continues to weaken the currency and knock confidence. Tuesday, Eurozone Services PMI data will give an updated look of the situation in Europe and the ongoing recession.

Wednesday, will see GDP expected to keep the single currency in recession. Thursday’s interest rate decision and press conference will be a big ticket seller with investors looking for direction from the central bank as LTRO payments continue to roll in.

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