BoE MPC voted 6-3 to hold interest rates in March. Dale and Weale voted for 25bp hike and Sentence for 50bp. This is no change on last month’s vote split, where we saw Dale join the hawks to hike. Yesterday GBPUSD reached a 14 month high as the market sentiment was that the BoE will be under pressure to hike rates soon due to the pressure of inflation. Inflation data came out at a staggering 4.4% YoY level, well over the 2% target. The news of no-change on vote …

The pound strengthened to $1.64 for the first time since January 2010 and gilts slumped as U.K. inflation accelerated more than economists forecast, fuelling speculation that the Bank of England will raise interest rates in the coming months. Sterling appreciated the most in a month versus the euro yesterday, while gilt yields jumped to the highest in a week.
Consumer prices rose 4.4 percent in February from a year earlier, according to the Office for National Statistics, higher than the 4.2 percent median forecast of economists in a Bloomberg News …

The G7 agreed to intervene to help Japan recover from the earthquake disaster. This is the first time the U.S., U.K. , Canada , European Central Bank and Japan have acted in concert in the foreign exchange market in over a decade. It was a response after Japans currency strengthened to post-World War II highs which seriously threaten economic recovery. Two days ago we saw USDJPY reach a low of 76.72. The intervention that began at 9am in Tokyo (00:00 GMT) immediately weakened the currency forcing USDJPY up to 81.98.
Since …

RISK APPETITE SUBDUED AS FOCUS REMAINS ON JAPAN
Euro sentiment was hit overnight on the back of the news from Moody’s that it is downgrading Portugal’s long term government bond ratings, with the USD/EUR rate failing once again to make a sustained break through the $1.40 level. However, the sell-off was not extreme with some seeing the move as little more than catch up with other agencies who have already downgraded. The main issue for markets remains the situation in Japan, with the ongoing uncertainty about the nuclear crisis keeping risk …

There has been catostrophic events moving the market over the last week however the Eurozone debt crisis is still looming and cannot be ignored. The Euro was hit following Portugals downgrade by Moody’s rating agency, from A1 to A3 with a negative outlook and further pressure was put on the currency this morning as Prime Minister, Jose Socrates, comments implied Portugal will need a bailout. We saw EURUSD touch on the big figure 1.4000, also a resistance level, before dropping as the London session opened. The pair has since rebounded …

Global stock markets have slumped as investors become increasingly risk averse. The stock market in Tokyo has fallen by the greatest amount since 2008 and oil has been pulled back under $100 a barrel as speculators guess that production from the world’s second largest economy will slow and demand for oil will slow driving oil prices further south. The Nikkei 225 Stock average declined 6.2% with $306Bn wiped from Japanese equities markets. The S&P 500 and the Dow have followed suit losing over 1% as concerns over the fallout in …