Interest rates stay on hold as Pound holds firm

Yesterday’s interest rate announcements in the UK and Eurozone, as expected, were for no change in both cases.

The UK’s base rate remains at 0.5% with the Eurozone at 1.5%. Of more interest will be the accompanying minutes from the UK’s monetary policy committee in 2 weeks, and the Bank of England’s quarterly inflation report which is out next week and usually shapes interest rate policy which in turn has a considerable effect on the value of sterling.

Elsewhere volatility continunes amidst concerns that the USA is heading for a second recession, and further worries in Europe that the debt crisis could spread to more countries requiring EU bailouts. This week has seen opportunities to buy both currencies at favourable levels, as breaking news has been affecting exchange rates and may continue to do so.

This afternoon we also have crucial US employment data released at 1.30 UK time which is can have a signiifcant effect on US Dollar rates.