GBP Bulls where slightly disappointed today when the BOE though citing fears about rising inflation gave no imminent clues as to how soon they may raise rates, the Cable fell against the Greenback to 1.2500 after piercing above the November post Brexit high which also doubles as the January 26 high, Mark Carney though saying the “Committee would not tolerate Inflation over-shooting the Banks longer-run Inflation objective” made it clear that there were still downside risk spurring from BREXIT which was yet to diminish. The Governor though acknowledging the fact that the UK Economy was showing strength and resilience coupled with a rising inflation this was due to the stimulus package introduced in August and the subsequent weakness Pound nevertheless because the full impact of Brexit was yet to be felt, it would be too early to start talks of a removal of the Stimulus package or rate tightening. The Pound fell as traders covered their long positions based on the disappointing statements from the Governor.
The AUSSIE was the best Performing Currency today, gaining more than 100points above the greenback on the back of the better than forecasted Trade Balance report, this is the Second straight Month that we have had a Surplus Trade Balance report, the highest Since March 2014, coming out at $3.5B better than the forecast of $2.0B, the previous was even revised higher to $2.04B from a figure of $1.06B , this is a good sign that the AUSSIE Economy is expanding and could bring back to the Table talks of interest rate decision. We could see the AUSSIE appreciate in the following weeks as inflation pressures pick up more, this may force the RBA to raise rates In its next meeting.
The US Non-Farm Payroll data is expected to come out by 8.30 EST /1.30 GMT, the ADP NFP came out strongly, better than forecast with a difference of about 80k, the Employment sub-index of the ISM Manufacturing came out at 56.1 showing an increasing employment situation in the US Economy, this is the 6th Straight Month we have had increasing expansion, although the ISM Non-Manufacturing which is part of the mix to gauging the potential outcome of NFP is not yet out it can still be safe to say that Fridays NFP data may beat expectations considering also the possible spill-over effect of the recently concluded festivities. Challenger&Grey’s Job cuts also surged as firms in the US reduced their downsizing by -38.8%, In light of this if we get strong job numbers it will further make the case for the FEDZ projected 3 rate hikes this year this would be if Economic risk spuring from Trump’s policy decision don’t dampen economic growth.