Forex snapshot

GBP/USD traders will have plenty to focus on today with the latest Monetary Policy Committee voting, while EUR/USD traders will be watching to see if there has been any improvement in the eurozone inflation rate.

Headquarters of the European Central Bank
Source: Bloomberg

GBP/USD traders await MPC vote

Having taken over three years for the monthly MPC votes to change from 9-0 to last month’s 7-2, it will be interesting to see if the two members who voted for change are resilient in their thinking. The UK’s economic data releases have been less impressive over the last couple of months, falling off the pace set by the US. Also clouding the issue is the current Scottish referendum; if it comes in as a ‘Yes’ we could well see the last vote become irrelevant.

The short-term emphasis on GBP/USD remains negative, and with less than 24 hours until voting in Scotland starts volatility could be high as uncertainty over the makeup of sterling remains unclear.

Spot FX GBP/USD chart

France causes concern for EUR/USD

France continues to do its best to destabilise the global perception of the eurozone. Rather than aiding Germany in forming a template for others to follow, France’s economic and political stability remains cause for concern. The fact that Francois Hollande has seen his popularity drop to historic 13% lows offers more than enough proof that France is a country struggling to work towards a common goal. This followed better-than-expected German ZEW economic sentiment figures of 6.9, but when compared the January’s 61.7 reflects how confidence has dropped.

Today will see the release of the latest eurozone inflation figures and European Central Bank president Mario Draghi will be hoping that they do not fall any further, especially considering the stimulus strategies that have now been put in place.

With the US Federal Open Market Committee set to report its economic projections, the pressure on EUR/USD to head lower is likely to continue.

Spot FX EUR/USD chart

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