Today and in general this week, markets are calm in the absence of important economic fundamentals from the euro zone and UK, where the main highlight of the week will be BoE rate decision.
Last week, the ECB left interest rate unchanged at 1.00% and said will give banks three-month loans in October, November and December, in addition to seven-day and one- month funds that would be provided at a fixed interest rate until at least January 18.
The bank will keep borrowing cost at its current low level to boost growth and will continue loan offering to banks into 2011 to support the financial sector that is still impacted by the financial shock of 2008.
However, the economy has been showing remarkable improvement since mid-2009 and achieved 1.0% expansion in the second quarter, which prompted policy makers to raise growth forecasts for this year and next.
ECB said growth will move around 1.6% compared with June's estimates of 1.0%, while in 2011 the rate is expected to reach 1.4% instead of 1.2%.
By and large, the economic conditions, according to recent data, is providing clues that the situation in the euro area is better than the UK that although grew 1.2% in the second quarter is showing slowdown.
BoE policy makers are expected to keep the interest rate steady at 0.50% and APF quantity at 200 billion pounds to boost recovery amid the planned spending-cut announced in the emergency budget on June 22.
The British pound is retreating against the euro in September where the pound has stopped its upside trend direction against the euro on upbeat outlook for the euro area.
Yesterday, the pair was trading around 0.8380 after the breach of important resistance at 0.8356 which if the pair remained above may rise further.
