Big day economically in the UK trading Bank of England Interest Rate Decision

Cable opened Thursday in Asia at 1.6545 and has been trapped in a narrow 1.6525/1.6560 range ever since, with the market generally happy to sit on its hands ahead of tonight's BOE MPC rate statement. JPY crosses were bid early on residual momentum from a positive night on Wall Street giving the risk appetite a boost, and buying for the Tokyo fix, with GBP/JPY opening on its lows at 152.15 and reaching a high of 152.60 before drifting lower postfix, currently 152.32. EUR/GBP has been quiet so far, opening at 0.8801 and trading a narrow 0.8796/0.8805 range. A big day economically in the UK today with the release of interest rate statement, the Bank of England is widely expected to hold the benchmark interest rate at 0.50% and is likely to maintain its GBP 175B.

The EUR/USD opened the Asian session at 1.4560 after trading to 1.4605 during the US session when the USD fell sharply across the board on stops. The EUR/USD traded up to 1.4565/70 in early Asia on EUR/JPY buying out of Tokyo and a rumour that some of the EUR/USD buyers in recent days have been flows related to the recent purchase by China of 50 BLN USD worth of SDR-denominated IMF bonds. The rumour was dismissed by the larger players and the EUR/USD slipped back to 1.4543 when the EUR/JPY fell in sympathy with a fall in AUD/JPY following weak Aus employment data. The EUR/USD moved higher again later in the morning when the USD fell across the board on heavy selling by UK clearers and US names believed to be on behalf of macro funds. The EUR/USD traded back to 1.4578 and was trading just below that level late in the session.

OPEC said it will keep oil production quotas unchanged, banking on a recovery in the world economy to maintain prices near today’s $71 a barrel. The Organization of Petroleum Exporting Countries agreed to maintain total production quotas at 24.845 million barrels a day, and will urge members to adhere to their targets, OPEC Secretary-General Abdalla El-Badri said at a press briefing. It’s the third time in 2009 the group has met without changing output. Crude oil rose for a fourth day in New York as the falling dollar spurred investors to buy commodities as a counter against inflation and an industry report showed a decline in U.S. inventories. Oil also gained after OPEC agreed to maintain output targets. The dollar weakened further after slipping yesterday to an almost one-year low against the currencies of six major trading partners.

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