US employment report awaited

Today's Highlights

Aussie Dollar 'Overvalued' says RBA

Euro hit by ECB QE plans

US employment report awaited

FX Market Overview

Of course Harrison Ford can successfully crash-land a vintage aircraft on a golf course. He's Indiana Jones, he's Han Solo, he's Jack Ryan and he's Bob Falfa in the mean Chevy in American Graffiti. There's nothing he can't do.

In slightly less dramatic style, both the Bank of England and the European Central Bank left their base rates alone yesterday but the ECB laid out their plans for the process of buying bonds and injecting funds into the European Financial markets. In fact they fired the starting gun on doing so. So from Monday 9th March, the Eurozone will start to be inflated through expanded funding. No wonder Mario Draghi also upped his growth forecasts but he may have been premature in claiming the Eurozone crisis as being over. Would someone remind him of Greece and Australia as examples of potential threats.

The net result of the ECB action was that the Euro weakened significantly; hitting an 11 year low against the US Dollar. The Sterling - Euro exchange rate is at levels not seen since mid-2007 and may well be heading for €1.40; which is almost pre-crash levels. Within its trading channel over the last 9 years, the Euro - Dollar exchange rate has scope to fall to $1.04. That's a 'gulp' moment for anyone who isn't hedged and needs to buy USD.

We heard overnight that the Reserve Bank of Australia believes the Aussie Dollar is overvalued by 2%. That clearly has a negative impact on exporters but it does dampen inflationary pressures. So it is a double edged sword for the Australian authorities. The Aussie Dollar reacted by strengthening; such is the contrary nature of the financial markets. It gained a cent against the Pound, so does that mean it is now 2.5% overvalued? Who knows; these measurements are so arbitrary.

Today's big news is the US employment report. A further slowdown in the pace of job creation is expected and that is perhaps one of the main factors supporting the belief that US interest rates will remain on hold for an extended period. Some members of the Federal Reserve baulk at that view but with the ECB adding liquidity and the likes of the Reserve bank of India doing likewise, there is clearly a desire amongst many central banks to maintain a weak currency. So a US rate hike would be at odds with what is happening elsewhere. The Strong US Dollar is not helpful to US growth but as mentioned earlier, it does help to cap inflation.

And I think what is so disturbing about the story of the 11 year old boy whose mother sent him to school dressed as Christian Grey is that the mother; a primary school teacher, doesn't know what is wrong with her choice. I just hope to goodness that her son doesn't understand what all the fuss is about but I kind of suspect he does. For goodness sake, let your child have a childhood.

And finally, if you get caught for speeding in Finland, the fine is linked to your income. So when one driver was caught doing 64mph in a 50 zone, his fine was set at £40,000. Luckily - and unluckily - for him, his annual income was assessed at £4.2 million. I think he can afford it but is it a deterrent?