Sterling & the euro fall as the BOE halts QE and Greece remains a concern

The British pound fell against the dollar on Thursday as the Bank of England put its program of bond purchases on hold as expected, but left the door open for more if the economy faltered. The BoE announced no increase to its unprecedented 200 billion pound "quantitative easing" program, pausing after 11 months of asset-buying. It also left UK interest rates at a record low of 0.5 percent, as expected. The central bank said in a statement it would continue to monitor the program and could make further purchases should the outlook warrant them.

But it also said, "This stock of past purchases, together with the low level of Bank rate, would continue to impart a substantial monetary stimulus to the economy for some time to come." George Buckley, UK economist at Deutsche Bank, said: "The statement sounds reasonably dovish to the extent that they are saying the recovery is going to continue at a slow pace. The GBP/USD is currently trading at $1.5760 as of 20:34pm, GMT, with a bullish trend.

The euro risks tumbling to $1.3405 should it close tomorrow below a weekly moving average, Commerzbank AG said, citing trading patterns.
Euro-dollar is “sitting” on its 200-week moving average, said Karen Jones, head of fixed-income, commodity and currency technical analysis in London. Europe’s common currency has weakened on speculation that fiscal deficits in countries including Greece and Portugal may weigh on the region’s growth, prompting bailouts and spurring the European Central Bank to keep interest rates lower for longer. The ECB kept its benchmark rate at a record low of 1 percent. The EUR/USD is currently trading at $1.3745 as of 20:50pm, GMT, with bearish trend.

Canada’s dollar dropped against the yen and the greenback as an unexpected increase in U.S. jobless claims and Europe’s deficit troubles led to a rout in commodity prices and equities. “Commodity currencies are getting pasted right now,” said Jack Spitz, a managing director of foreign exchange at National Bank of Canada in Toronto. “The U.S. dollar is up, the yen is up, risk is being pulled off the table.” The USD/CAD is currently trading at 1.0725 as of 21:10pm, GMT, with a bullish trend.

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