5 Feb 07
EUR (Losing Strength) - When the finance ministers from the G7 meet in Germany next weekend, European policy makers have said they will push for a discussion about Japan's low currency, the yen's low value gives Japanese exporters an unfair edge against competitors that have to pay for their costs in euros. Traders will focus on the Rate Decision and Trichet on Thursday, and sentiment has it that the BOE is less likely to raise rates in the short term, a rate hike is more likely in March.
GBP (Losing Strength) - Only five of the 62 economists surveyed by Reuters in recent days think the Bank's monetary policy committee will stage a back-to-back rise at the end of its two-day meeting on Thursday. The uncertainty revolves around whether last month's increase merely brought forward an expected February rate rise - or whether the MPC's view of inflation risk has changed to the point where it felt additional tightening was required. Although recent mortgage lending data suggest that the 0.75 percentage point rise in interest rates since last August may be starting to have an impact, most of the recent economic data have been strong, in terms of pay settlements and signs of companies pushing through higher prices.
Later
2300h - USD : Non Manufacturing Index
2300h - CAD : Ivey Purchasing Managers Index
