Busy day ahead for currencies

We have a busy day on the markets today, which could have quite significant effects on many of the world’s most traded currencies.

At home we have UK unemployment out first thing this morning, followed by the release of the Bank of England’s quarterly inflation report and the accompanying speech from the bank’s governor Mervyn King. Unemployment has been one of the “good news” releases over the last few months, but will this change now the Olympic effect has very much run its course? Inflation showed a surprise jump yesterday, which while negative for the UK economy, is often a positive for the Pound as it restricts the chance of further injections of Sterling from the BoE, and as such dilution of the currency. What will Mervyn King make of this?

In Europe we have already had some inflation numbers, and we still have some industrial production figures and a 10 year bond auction in Italy. A relatively quiet day, but could still draw some response from the markets, especially if borrowing rates are pushing up again for one of Europe’s weaker members.

Finally in the US we have a release of the FOMC minutes this evening, which should give a clear indication of the Fed’s thinking towards the current economic position and is likely to further highlight things Stateside following last week’s election win for Barack Obama. Recent data releases from the US have been slightly more positive, especially employment figures, and with the seeming “stability” of Obama’s victory, the Dollar has been enjoying some recent strength.

All in all, things could be pretty hectic today, with the possibility of some quite big moves for Sterling, and maybe the Dollar in later trading. Make sure you keep in close contact with your CI account manager if you have an imminent requirement, as things are likely to move fast.