Let's talk GBP/EUR. Following the 9 to 0 unanimous vote by the Monetary Policy Committee (MPC) to raise interest rates in the UK to 0.5% the Pound jumped versus the Euro yesterday. However the rate then plummeted afterwards. The reason for this was that Christine Lagarde, the President of the ECB, has changed tack and now appears hawkish on the Euro. In December the rhetoric from the Eurozone was for no rate hikes. However, in yesterdays press conference, Lagarde suggested rate hikes were on the cards.
As we had previously mentioned any correction would be sharp which it certainly was yesterday.
As the UK rate hike was already priced in it's difficult to see a catalyst for the GBP/EUR rate to push back up in a hurry. There's still plenty of political turmoil playing out in various parts of the UK suggesting the Pound possibly isn't out of the woods yet.
The Eurozone Retail Sales numbers out later may have some effect on the rate.
In the States it's Non Farm Payroll day. This is a bellwether snapshot of the health of the US economy and employment market showing changes in job numbers in the US removing seasonal fluctuations. Analysts are expecting job growth of 150k jobs. Any significant variation to that number could see the Dollar move.
Outside of this other majors exchange rates are in status quo. Chinese New Year is still being celebrated in China so their markets are closed and Canada announces it's unemployment rate later.
As ever we look forward to keeping you in the loop and look out for our next update.
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Today’s Economic Calendar
EUR: 10:00 Retail Sales
US: 13:30 Non Farm Payrolls
CAN: 13:30 Unemployment Rate
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