All eyes on Trichet

[RTFX-Trading]

USD weakened against a basket of currencies as investors are enjoying their profits.

EUR/USD trade higher earlier this morning after the report of German trade balance which came out at 18.1 billion euros against 15.0 billion euros forecast.

BoE left the rate unchanged as widely expected at 5.0%. GBP/USD stays steady after the announce, trading at around 1.9516, EUR/USD at around 1.5467, and USD/JPY at around 109.43.

ECB rates decision is at 13.45 CET today. Just like for the BoE, the market expects for ECB to keep their rates on hold at 4.25%. Thus the market is focusing on Jean-Claude Trichet’s press conference at 14.30 CET. And just like other banks, ECB’s concerns turns around the slow growth and inflation. The drop in oil prices to 117.11 a barrel on Wednesday has not changed anything much.

Experts say that the economic growth in the Euro zone has worsen since the ECB raised rates a quarter of a percent last month, but the ECB would want the market to think that they are about to ease policy just a month after tightening it, thus they may continue to undermine the inflation.

There is still expectancy in the market that the dollar may still strengthen in the medium term, but many sees the recent gains to be overdone.