Coming Up Today (all times GMT)
- GBP Bank of England MPC Meeting (11:00)
- EUR ECB Interest Rate Meeting (11:45)
- USD Trade Balance (12:30)
- CAD Trade Balance (12:30)
In what is expected to be an action packed day, the Forex markets have taken little time to get things going and have been in risk rally mode the entire morning. Creating the optimism was an interest rate hike in New Zealand from 2.5% to 2.75%, plus better than expected Australian employment numbers. As such, the Kiwi and Aussie have been outperformers this morning and are both up over 1.05 against the Dollar. Also, the EURUSD which had been unable to sustain its move above 1.2000 yesterday, is back towards the 1.2050 level.
Looking ahead, volatility should continue with the upcoming BoE and ECB MPC Meetings. Forex traders will be specifically looking towards the BoE meeting as it is the first one following the formation of the new UK Parliament.
Rallied near 1.2100 but then faded below 1.2000 yesterday. This indicates that buyers aren't taking much of a chance with the EURUSD and are quick on the trigger finger to take profits and dump the pair.
Since bottoming out at 1.4350 following negative comments from credit rating agency Fitch on Tuesday, the GPBUSD has found buying support and steadily risen to its current 1.4580 level. Looking ahead, all eyes will be on the BoE meeting. If they make no changes it could be seen as a sign of confidence to the new UK coalition and may lead to further GBPUSD rallying.