Heavy data was released today starting with Swiss inflation, to UK and Germany's industrial production yet the focus remained on rate decision and the ECB press conference and the ADP figures from the United States.
The Bank of England left interest rates at 0.5% and the APF at 200 billion pounds as expected while the ECB delivered the rate increase taking the benchmark interest rate to 1.50% from 1.25%.
Markets remain mixed and jittered till now, awaiting the comments from Trichet amid mounting debt woes, while the ADP figures will be the first strong signal for tomorrow's NFP.
The euro was trading with a clear downside bias since morning, and despite the rate increase, which was already expected, the focus remains on the mounting fiscal imbalance in the euro area. The pressure is evident since the beginning of the week and intensified after Portugal's rating was lower to junk and Trichet is awaited today to ease some of the woes amid rising difficulties and threats to financial stability.
The EUR/USD declined from the high of 1.4347 to the low of 1.7263. The negative pressure is evident most of the session though some stability is seen after the rate decision and ahead of the press conference for the ECB president.
As for sterling, it continued the downside move versus the dollar for the third consecutive day. Sterling remains weak and the BoE is unable to change its status amid the fragile recovery and the surging inflation which forced the MPC to hold the monetary policy yet again and keep the downside pressure on sterling. The pair declined from the high of 1.6017 to the low of 1.5942.
Stability for the GBP/USD below 1.6045 keeps the downside pressure evident and pressure the pair towards 1.5880 as the suggested target for the downside move.
We are not pending the press conference from the ECB and the ADP and jobless claims from the United States to set the tone for tomorrow's nonfarm payrolls and accordingly high volatility and fluctuations is expected.