The market focuses on three things today. We have the central bank meetings of both the Bank of England and the European Central Bank, as well as a bond auction in Spain that will occur ahead of the ECB meeting.
Both central banks are expected to leave their rates unchanged, and the Bank of England is also expected to keep their asset purchase program at GBP 375 billion. In England today, the focus will be on the testimony of new governor Mark Carney, who will testify before the Treasury Committee.
As Bank of Canada governor, Mr. Carney was an advocate of GDP targeting and he is expected to come under heavy scrutiny this morning. The committee has already stated publicly that they will ask if there is a better monetary policy path for England. His comments will certainly affect the GBP.
In the meantime, UK manufacturing production surprised to the upside, and helped cable.
That’s just the warmup act. ECB President Draghi’s press conference following the rate decision is the main event. The market is waiting to see if Mr. Draghi eases up on his comments from a month ago, which triggered the upswing in the EUR. There has been concern voiced by European leaders regarding the recent strength of the EUR and how that effects the economy going forward. French President Hollande stated yesterday that Eurozone leaders shouldn’t allow the EUR to fluctuate “according to the mood of the marketâ€.
The EUR is presently trading towards the upper end of its overnight range. Resistance remains at the 1.3600 level and support at 1.3500. Not much is expected until later this morning.
More:Â ECB Preview: Will Draghi drag the euro down?
