[IMAGE] Forums Discuss these points in the Forums:  Forexnews Forum       Technicals Live Charts Analysis available from: Cornelius Luca   J.P. Chorek   Technical Research Ltd.   Charts & News featuring Standard & Poor's       Interest Rates   US: Japan: Eurozone: UK: Switzerland:   1.75%  0.15%  3.25%  4.0%  1.25-2.25%       [IMAGE] 	 [IMAGE]  Sterling Steady After BoE, Markets Now Await ECB  February 7, 7:00 AM: EUR/$..0.8665 $/JPY..133.71 GBP/$..1.4108 $/CHF..1.6991  Sterling Steady After BoE, Markets Now Await ECB by Jes Black  At 7:00 AM Bank of England Monetary Policy Meeting At 7:45 AM European Central Bank Monetary Policy Meeting At 8:30:00 AM US Jobless Claims (exp 380k, prev 390k) At 3:00:00 PM US Dec Consumer Credit (exp 7.3 bln, prev 19.9 bln)  The euro and pound held to a tight range against the majors ahead of today's key central bank meetings. Both the European Central Bank and the Bank of England are expected to hold rates unchanged at 3.25% and 4.0% respectively. Meanwhile, traders will continue to look to Wall Street for direction in the dollar as caution has again taken hold. Market expectations for a rebound in earnings are still seen by many as too optimistic. Therefore, the upside in the dollar is dependant on real economic growth while there is always a risk of a downward surprise.  Notably, the dollar failed to capitalize on stronger than expected productivity data on Wednesday as Wall Street came under increasing pressure in the face of investor caution. US stocks finished down after accounting worries, jitters over earnings warnings, and a murky outlook offset a 3.5% rise in Q4 US productivity. The Dow slid 32 points to 9653 and NASDAQ fell 25 points to 1812. Today's futures are unchanged. Company earnings reports include ALLIANZ AG, British Telecommunications PLC, MCI Group, Novartis AG, PepsiAmericas, Royal Dutch Petroleum and WorldCom Inc.-WorldCom Group.  The euro was little changed on the day except for a half cent spike higher after ECB President Duisenberg announced that he would retire in July 2003. Traders reacted favorably for the euro because there has been criticism on how the ECB sets its policy as well as the ECB President himself. Other ECB officials were quick to give their support for Duisenberg's decision and Italy's Tremonti says he thinks highly of BoF Governor Trichet as a person. His comment is seen solidifying the unity the ECB has for Trichet as a successor to Duisenberg.  The ECB is likely to cite inflationary concerns in January as preventing it from lowering rates this month. But markets are unlikely to react favorably to the ECB's decision due to the subdued outlook for growth this year.  The European Commission today said it forecast eurozone GDP will accelerate by anything between 0.1 and 0.4 percent in the first quarter of 2002 compared with the previous quarter. For the last quarter of 2001, today's data confirmed a small 0.1% rise q/q.  It would imply that the trough of the recent slowdown is situated in the last quarter of 2001, but also that activity will only moderately accelerate at the beginning of this year," the European Commission said in a statement.  As expected, the Bank of England held rates unchanged at 4.0%. Strong consumer spending and a boom in the housing market are offsetting the recession prone manufacturing industry. The net effect is for a relatively healthy economy. But markets may question why the Bank of England today decided to keep rates unchanged. With low inflation and the highest interest rates of either the US or the ECB, manufacturers are likely voice their discontent. However, the BoE is seen wanting to curb domestic demand to avoid a boom/bust cycle in consumer spending.   EUR/USD was little changed from its US close after a sharp rebound from a low of 86.45 to a day's high of 86.92 after Duisenberg's announcement. But the euro failed to rise above the psychological 87-cent mark and is again trading in a range of 86.50 to 86.80. Failure to regain resistance at 86.80 is seen calling upon support at 86.35 and 86.00, before another attempt at 86.60. Resistance is seen at 87.10, which marks the 38.2% retracement of the .8953-.8560 move. A rise above that level would target the key 87.50 mark and a breach of this level would be bullish for the EUR/USD. However, only a move above past resistance at 88.60 would really damage the bear trend.  GBP/USD fell to a day's low of 1.4085 after breaking support at 1.4115. Cable peaked at a 1-week high of 1.4247 in European trade on Tuesday. But failure to maintain above 1.4110 would call upon key support at 1.4180, which marks the 38.2% retracement of the 1.4418-1.4038 move. Follow up support is seen at last week's 6-month lows of 1.4045. Upside capped at 1.4235, 1.4270 and 1.4300.  Meanwhile, the Swiss franc is likely to remain under pressure against the dollar and euro after the Swiss KoF institute said today that their Q401 survey shows the economy will continue to slow in Q102 and not reach bottom until the end of H1.   Today's data from the US is expected to show another fall in jobless claims to 380k this week from 390k the previous. This will likely keep the 4-week average below 400k for a second week which is a clear sign of improving labor market conditions.  USD/JPY rose to a session high of 134.15 but dealers are likely to remain weary about pushing it beyond the 135 mark give recent comments from Japan's top financial diplomat, Kuroda, that Japan was comfortable with a range of 130-135, for now. Kuroda also said that rapid foreign exchange movements are undesirable. Therefore, given this weekend's G7 meeting, the yen is likely to remain in a tight range against the dollar.   Meanwhile, all eyes are on Friday's monetary policy meeting in Japan. Given the resurging pessimism surrounding the Japanese economy, there is a chance the Bank of Japan will take additional easing steps to stop the deflationary trend that menaces the economy.  In order to curb the sharp rise in Japanese Government Bonds, the Bank of Japan might surprise markets and increase the outright purchases of JGBs at Friday's policy meeting. Currently they purchase 800 billion worth of JGBs per month and may decide to increase this by 10-25% to around 1 trillion in an effort to increase liquidity and stabilize bond yields. The move would likely weaken the yen.  	[IMAGE] Audio Mkt. 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