By ForexMansion.com
Today might be a day to remember. ECB and BoE will be holding their monetary policy meetings. As BoE is expected to keep rates unchanged, ECB might raise their interest rate for the first time since 2008 by 0.25% in an attempt to fight the rising inflation.
Englandis also confronted with high inflation levels, but the economic conditions of the country do not permit the central bank to consider raising rates anytime soon. Yet the attention today might turn to the press conference held immediately after ECB’s meeting by President Trichet.
Markets are interested to see what he has to say since the economy faces many problems from the expanding sovereign debt crisis. Portugal asked for a bailout from the European Union, becoming the third country in the euro region that needed a rescue anfter Greece and Ireland.
Currency markets are moving cautiously awaiting the central bank decisions. The with some upside momentum for the euro and the pound. The euro trades around 1.4290 while the pound trades around 1.6330. Yet if ECB will not signal another rate hike, the euro might slip today.
There are worries among the markets participants of the implications of such a raise by the ECB, since the debt crisis continues to expand, and many economy within the region are under the strong grip of recession. Volatility is certain in the currency markets today.
The AUD reached to new highs as of this morning after the economy released a better than expected jobs report, which confirms the country’s strong economic performance, which may determine the central bank to start concentrating on the rising inflation and increase rates soon.
The rise in gold prices also sustained the AUD. The precious metal trades around its historical highs. Gold consolidated around the 1460.00 level. Now it awaits further international developments regarding the Middle East, North Africa, Japan and the European debt crisis before deciding which way to go.
The US will release today the weekly unemployment claims, while the congress did not decide yet about the Federal budget. Oil is trading above the 109 dollars per barrel level. Broad markets will turn cautious today, and market participants should prepare for swift moves.
Originally posted here
