The Bank of England's (BOE) rate statement is due at 12:00 GMT while the European Central Bank (ECB) press conference is expected at 13:30 GMT. While both banks are expected to keep their interest rates at their current level, the statements should provide an insight to the current economic conditions as well as economic outlook for the near future. The BOE is expected to increase its quantitative easing program.
Economic News
USD - USD Down Following Fed Statement
The Dollar traded near its lowest level in a week against the EUR after the Federal Reserve kept borrowing costs near zero. The Federal Reserve reiterated its intention to keep interest rates "exceptionally low" for "an extended period" as long as inflation expectations are stable and unemployment continues to rise. Until the Fed starts signaling interest rate increases, investors will continue to be encouraged to sell the Dollar and buy higher-yielding assets
The Dollar traded at $1.4874 against the EUR in today's early trading from $1.4861 in New York yesterday, when it touched $1.4909, the weakest level since Oct. 27. The Dollar traded at 90.82 yen from 90.72 Yen Wednesday.
The USD is expected to extend declines against its major counterparts ahead of Friday's Non Farm Employment report forecasted to show U.S. employers cut fewer jobs in October than in September, damping demand for the U.S. currency as a refuge as economic sentiment continues to improve. The unemployment rate may rise to 9.9%, from 9.8%.
Looking ahead to today, the Dollar's movements will likely be affected by the Central Bank statements from the U.K and Euro-Zone, however, the release of the Unemployment Claims at 13:30 GMT will likely have an affect on Dollar sentiment as well.
EUR - Pound Gains on Optimistic Services PMI
The EUR gained against 14 of its 16 major counterparts as the Economy Ministry in Berlin is expected to report Friday that German factory orders rose 1% in September after gaining 1.4% in August.
The British Pound gained 0.9% on the day. The Pound gained on both the Dollar and the EUR, after a survey of purchasing managers indicated the U.K.'s services PMI saw activity rise at its fastest pace in more than two years. The Bank of England is expected to increase the amount of debt it will buy from the market in today's meeting.
The EUR rose to $1.4871 from $1.4712. The EUR jumped to 134.68 Yen from 132.91 Yen. The U.K. Pound strengthened to $1.6565 from $1.6412.
A heavy news day is expected from Europe today. The bank of England statement is due at 12:00 GMT and The European Central Bank is slated to gives its latest policy update at 13:30 GMT. The ECB is expected to keep rates at 1%.
