The not so proud pound makes a fresh low

Cable made fresh lows of 1.4965 in the early Asian session trading to lows not seen since July 2010 on a report in the Financial Times that has suggested that UK Chancellor Osborne will announce at the post budget speech on March 20^th that under incoming BOE Governor Mark Carney the monetary policy will become more flexible with the article suggesting the MPC will have longer periods to get inflation below the 2% target allowing the old lady to adapt a FED style policy targeting employment and inflation. Today’s BOE meeting is now of high importance as although the committee seems split on a rate cut the bar for an additional £25 billion of QE seems a realistic possibility following outgoing King’s vote last month. I would be cautious selling sterling on such an announcement as this action could well be already priced in to the not so proud pound and could be possibly seen as a positive.

In other news the BOJ was a non event with outgoing BOJ Governor Shirakawa making his last appearance as he hands over to the new guard next month. Rating agency S&P revised up their rating on Portugal from negative to stable with the single currency seeing a very small bounce as we await the all important ECB press conference from President Draghi where the market seems unanimous that the ECB will keep policy unchanged with all eyes on the press conference for any mention of the Italian political situation although this will probably come in the Q&A session. The market for me has already fully priced in a further downgrade to Eurozone growth.

The data releases today include German factory orders with the weekly jobless claims data from the US along with trade data from both Canada and the US.

EUR/USD

Supports 1.2960-1.2880-1.2740 | Resistance 1.3070-1.3150-1.3200

USD/JPY

Supports 93.75-93.50-92.75 | Resistance 94.45-94.75-95.00

GBP/USD

Supports  1.4945-1.4880-1.4820 | Resistance 1.5015-1.5050-1.5090