Today's Action

Cable is the big winner of the day, as comments from the BoE about ending QE are leading it higher. Also, Crude Oil has shaken off a buildup in oil supplies which caused a drop to rally back to the unchanged level.

First, a recap of the numbers: (as of 19:15 GMT)
EURUSD : 1.4503 (+15 pips)
GBPUSD : 1.6290 (+117 pips)
AUDUSD : 0.9230 (+30 pips)
USDCAD : 1.0320 (-76 pips)
GOLD : 1137.00 (+ $3.00)
CRUDE OIL :  79.70 (- $0.80)
S&P 500 :1139 (+ 6.50points)

What did the BoE say?

Bank of England member Andrew Sentance stated to the Guardian  that the BoE has reached a point that it must debate whether to halt its asset purchases and survey the strength of the UK economy without QE. As a result, the GBPUSD is at four week highs and briefly topped the 1.6300 mark. As mentioned yesterday, the GBPUSD has managed to find buyers the past few days, even during periods of overall dollar strength. This points out to positive sentiment returning to the pound.

GBPUSD

Oil Inventories

Oil prices have slipped from their 2010 highs the past few days. Also, inventory numbers showed a much greater than expected build up, as supply rose to 3.7 million versus 1.2 million barrel consensus. The news caused oil to trade down to 78.50 from highs of 80.55, earlier in the day. Nonetheless, the move was short lived, as crude has traded back towards the 80.00 figure along with US equities that have moved higher.

Big Day Tomorrow

Looking ahead, tomorrow the ECB meets for their monthly interest rate meeting, and US Retail Sales numbers are released. Forex traders will be watching the ECB for possible comments about future rate hikes. At Go Forex we remind traders that it was the ECB which began to wave the red flag about rising Eurozone debt levels that caused the December weakness in the euro. As such, if ECB President Trichet continues his pessimistic stance towards the health of the Eurozone's economies, the euro could see weakness return.

Back in the US, the Retail Sales figures have been eagerly awaited, as they will shed light on the success of the 2009 holiday shopping season. Since Christmas ended, Forex traders have been debating what these numbers will be like, and their ultimate impact to the Forex markets.