Today we saw a pretty dramatic pause in action as markets pretty much came to a relative stand still ahead of the BoE and ECB rate decision that will be released later on at the tail end of the European session. The EUR/USD stayed in between 1.2798 and 1.2858 all session after it big tumble from 1.3050 levels less than 24 hours ago. The Euro had come under selling pressure in the wake of the rating downgrade of Russia and the perceived repercussions for Eastern Europe. The ECB will announce its rate decision at 12:45GMT and although the general consensus has been for no rate cut all week, over the past day the rumblings, although faint, are that the Central Bank could surprise with a 50 basis point cut. Prior to the ECB announcement we have the BoE rate decision which looks to be a 50 basis point cut to bring the UK's interest rate to 1.00%. No one expects any surprises here, and the GBP/USD trading has been muted all session as well, the pair strolling between 1.4400 and 1.4470 all session. The BoE announcement will be at 12:00GMT.
In other markets, USD/JPY did a bit of zigzagging between 89.22 and 89.51, but eventually ended up where it started the session, just near 89.40. The BoJ was spreading the gloom and doom by stating that the BoJ should be prepared to use unconventional steps in battling the floundering economy as it looks like the downward trend will continue.
Upcoming Economic Data Releases (London Session):
| 2/5/2009 | 11:00 | GE | Factory Orders MoM (sa) | DEC | -6.00% | -2.50% |
| 2/5/2009 | 11:00 | GE | Factory Orders YoY (nsa) | DEC | -27.20% | -24.50% |
| 2/5/2009 | 12:00 | UK | BOE ANNOUNCES RATES | 5-Feb | 1.50% | 1.00% |
| 2/5/2009 | 12:45 | EC | ECB Announces Interest Rates | 5-Feb | 2.00% | 2.00% |
