Daily Market Report 27/01/2014 GBP Mark Carney made a speech on Friday stating that the UK economy has not yet reached ‘escape velocity’. He also stated that the BoE will update its forward guidance on future interest rate rise as the Bank was not expecting the rate to fall to 7% for another two years. Carney was quick to reaffirm that the Central Bank would not carry out an interest rate hike in the nearest future, as there was “no immediate need” for such a move. GBP Mark Carney made a speech on Friday stating that the UK economy has not yet reached ‘escape velocity’. He also stated that the BoE will update its forward guidance on future interest rate rise as the Bank was not expecting the rate to fall to 7% for another two years. Carney was quick to reaffirm that the Central Bank would not carry out an interest rate hike in the nearest future, as there was “no immediate need” for such a move. The pound fell from a 2 ½ year high against the dollar as Carney also commented that the currency’s strength may harm exports and reaffirmed that the Central Bank would not carry out an interest rate hike in the nearest future, as there was “no immediate need” for such a move. The pound also weakened after the British Bankers’ Association revealed on Friday that U.K. mortgage approvals rose by 46,500 in December, less than the expected 47,200 increase. EUR European Central Bank President Mario Draghi made a speech on Friday evening commenting of a “dramatic” improvement in the health of the euro area economy and that inflation will gradually return to the target of under 2%. Draghi stated “What we have been seeing in the past three or four months is both the improvement in financial markets and that our accommodative monetary policy is finally being passed through to the real economy”. As a result the euro drove higher against the US dollar and finished the week higher against the pound. CAD Canada’s annual inflation rate climbed to 1.2% in December from 0.9% in November, largely due to higher gasoline prices, but remained well below the Bank of Canada’s 2.0% target. The data gave the Canadian dollar some much needed respite after falling to fresh 4 year lows against the pound earlier on in the week. Today Data this morning from Germany has revealed that IFO Business Climate and Expectations both improved for January giving the euro some support in early morning trade. Key Announcements: 13.58pm – USD – Markit Services PMI (Jan): Expected to increase to 56.2. 15.00pm – USD – New Home Sales (Dec): Expected to fall to 457,000. 15.30pm – USD – Dallas Fed Manufacturing Business Index (Jan): Previously at 3.1.