BoE may need to revise their policy

The pound continued trading lower yesterday, touching a three week low as the BoE quarterly inflation report showed a downward revision of growth and inflation will remain above the comfort band for the following two years.

Overall the GBP/USD traded with a low of 1.9366 and a high of 1.9473. The Bank of England may need to revise their policy on concentrating solely on inflation, like in the US where the FED targets both growth and inflationary issues. UK interest rates at 5% may remain for the foreseeable future as the cost of living rises and economic growth prints lower month on month.

In comparison in the US, the FED is in a surprisingly envious position as it has already dramatically reduced interest rates and can now complete its cycle. A heavy data day is scheduled out of the US today with TIC flows, Philly Fed, whilst Fed Chairman Bernanke is scheduled to speak on Credit Market Turmoil in Chicago, showing us a clearer picture of how the problems with the US economy might be resolved.

The EuroZone is feeling the pressures in the strength of the Euro as Industrial Productions come in softer and we will look to further key indicators today at 10:00 such as CPI & GDP to help us gauge how their economy might be performing under pressure as well.