Bank of England hold rates
The Bank of England (BoE) held interest rates at a record low 0.5 percent, as widely expected. Some analysts said the BoE's decision did little to change the market's view that more quantitative easing measures may be needed to stimulate the economy if fiscal austerity measures further slow the pace of recovery later this year.
"There is fiscal tightening going to take place which will slow the economy and will be sterling negative," said Ian Stannard, senior currency strategist at BNP Paribas. "The chances of quantitative easing is very much alive." More QE would probably weaken the pound.
Global Economy slowing
The global economic recovery is slowing faster than forecast, but a return to recession is unlikely, a leading global economic group has said. The Organisation for Economic Co-operation and Development (OECD) said the slowdown had been more "pronounced than anticipated".
As a result, it lowered its growth forecast for 2010 for the G7 leading economies to 1.5%, down from 1.75%. It added the economic outlook was characterised by "great uncertainty".
The news will likely push investors back to safe haven currencies, strengthening them. Usually this is the USD and CHF.
On Monday, we'll have a detailed forecast for Pound to Euro, Pound to US Dollar, and a full breakdown of next weeks data.
Today's Data
A quieter day, with only producer prices from the UK. This is a monthly measurement of the rate of inflation experienced by the UK manufactures when buying goods and services. It can often affect the pound, so we may see some exchange rate volatility today.
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