Market Commentry

6 September, 2012

Graham Harborne

After some reasonably positive UK data and poor retail sales from the eurozone we initially saw the pound rise against the euro though it remained fairly steady against the dollar. However following leaked reports regarding today’s ECB meeting, there were change come the afternoon trading as the pound followed the euro and soared against the dollar but retraced its early gains against the euro.

The report on Bloomberg claimed that ECB president Mario Draghi is set to announce the much anticipated bond buying plan at today’s meeting in an attempt to recover the seemingly woeful state of the 12 nation banking sector. This is not the first time we have had reports of announcements leaked early and you can be rest assured that there is no guarantee that what was reported will actually happen. There are a number of factors that need to be figured in and the extent of any bond buying will ensure that markets remain cautious right up to the announcement at lunchtime today.

Elsewhere today is also the BoE announcement and though we do not expect and changes on the MPC’s stance on both interest rates and quantitative easing don’t be surprised if we see another spanner in the works when the specifics are released at midday.

If you don’t want to take the ‘central bank’ gamble then contact your broker here at Currency Index this morning to discuss all the options available to you.