After adding a further 50 billion GBP quantitative easing by the BOE the main focus of yesterday was the sell off in sterling across the board as the market looked as this as a negative for the currency. New York trading was subdued ahead of today’s NFP data which will give further direction for the currency. The Governing Council does not yet seem ready to buy wholesale into our view that there will be positive euro area growth dunring H 209: Mr Trichet several times warned that the stance should be one of “prudence and caution”, not least since the data flow could be volatile and since there was concern that the pace of unemployment increases may remain high and thereby affect the chance of recovery. A fairly quiet session flow wise for the currencies a few buyers taking profits in EUR/USD and GBP/USD at the Tokyo open.

Tags:  EUR Forex GBP sterling