Dollar and Euro dive over poor economic data

The dollar has fallen below critical technical support in Sterling at 1.9600 and exchanged as low as 1.9500. The Euro has also taken a dive weighed down by some poor economic data.

German factory orders declined month on month as did European Retails Sales in March. This is a six week high against the Euro and a 10 week peak against the Pound ahead of today's rate announcementsfrom the ECB & BoE.

ECB are expected to hold rates despite lacklustre economy. All eyes are on the post decision press conference where Mr. Trichet may up his hawkish stance especially in light of the sharp rise in oil and commodity prices.

The BoE are more likely to cut rates now than they were a few days ago where we have since printed weak consumer confidence numbers and industrial output figures, although unlikely to do a U-turn in its anti-inflation rhetoric with back to back cuts.

EUR-GBP will become an interesting play should any of the banks cut today.