Daily Insight

We have bundles of data out today, including UK PMI (09:30), the ECB meeting at 12:45, US Jobless claims at 13:30, ISM manufacturing at 15:00...etc...etc..

Sterling had a bounce yesterday after a report from the Organisation for Economic Co-operation and Development downgrading UK growth prospects to 1.7% from earlier estimates of 2.4%. You may be thinking this should be bad news for sterling, but the OECD concluded that despite the weak growth, the Bank of England would not need to cut interest rates. Indeed, they also upped their inflation target by 0.1% to 2.1%, suggesting that inflation remains firm, while growth is slowing. This leaves the BOE little room for manaouvering to the downside on interest rates. The UK slowdown is being blamed on falling consumption due to the gradual end of the housing boom. Inflation is still higher due to oil prices and rising import prices.

GBP EUR - Support 1.4650 then 1.4632
Resistance 1.4700 then 1.4741

GBP USD - Support 1.7250 then 1.7140
Resistance 1.7349 then 1.7400

DATA: EMU PMI (09:00)
UK PMI (09:30)

ECB Meeting 12:45 - A 0.25% rise is already priced in. If there's no rise the Euro should fall sharply.

Jobless Claims (13:30)
US ISM (15:00)