EUR
The Euro suffered significant losses during Thursday’s session, most notably
against the Dollar where the single currency fell to an 11 year low, dropping
1.2 per cent. The Euro’s losses were also noticeable against the Pound, where
the fall was just above 1 per cent.

The move came after European Central Bank (ECB) president Mario Draghi
announced a €60bn-a-month government bond-buying programme – much higher than

EUR
The Euro suffered significant losses during Thursday’s session, most notably
against the Dollar where the single currency fell to an 11 year low, dropping
1.2 per cent. The Euro’s losses were also noticeable against the Pound, where
the fall was just above 1 per cent.

The move came after European Central Bank (ECB) president Mario Draghi
announced a €60bn-a-month government bond-buying programme – much higher than
the expected €50bn a month until the end of September 2016, meaning the
programme will total €1.26 trillion euros. With its main interest rate at just
0.05 per cent. Draghi had a limited arsenal of weapons to counter inflationary
pressures, after the Eurozone slipped into deflation in December for the first
time since 2009, with a 0.2 per cent year-on-year fall in prices.

As recently as the beginning of this month, there had been speculation the bank
would avoid a fully-fledged QE programme altogether. But last week a decision
by the European Court of Justice effectively gave it the green light, when it
ruled a previous monetary easing policy, called Outright Monetary Transactions
(OMT), was compatible with European law.

 USD
The safe haven Dollar strengthened yesterday off the back of market
uncertainty, despite disappointing jobs figures for the US.More Americans than
forecast filed applications for unemployment benefits last week, a sign of
lingering holiday turnover. Holiday staffing needs create swings in employment,
making it difficult for the government to seasonally adjust its weekly data this
time of year. Employment is likely to keep growing as the world’s largest
economy shows signs its sustaining momentum amid a global slowdown.

Key
Announcements:
GBP – 09:30 – UK Retail Sales (Dec) Ecpected to fall from 6.4% to
3.0%
USD – 13:30 – Markit PMI manufacturing figures (Jan) higher to 54.0 from 53.9

Our dealers are available via e-mail ([email protected]) or by phone (020 7220 8181).