FX.co ★ Fundamental Analysis for March 8, 2012

For two days we expected the publication of the most important news of the week, and perhaps of the month, with respect to currency.
Within minutes the Bank of England will announce its monetary policy for the current month, with no substantial changes are expected. Interest rates remain at record low 0.5%, although Governor Mervyn King emphasizes their importance. The data concerning the causes of this decision and the procedure of voting will be released within two weeks.
In the meanwhile, at 7:45 Eastern, the European Central Bank will also announce its benchmark interest rate, which will remain unchanged at 1%. At 8:30 the subsequent press conference was held by Chairman Draghi in order to clarify the steps aimed at stimulating the economy of the countries in trouble.
This news was released amid the quarrels in Greece, where 60.6% of the creditors agreed to start the proposed debt-restructuring until the Thursday afternoon. If the proposal is accepted by desired 70%, then, according to the Greek legislation that regulate the debt swap, the other 30% are obliged to accept the agreement as well.
Thursday’s news from Greece changed the general picture of the European session. The bags are growing in good shape, and the coins are moving within an upward trend against the dollar.
This fact explains the movement of the euro, which again exceeded 1.32; the pound sterling failed to break the 1.58 level; and currencies linked to commodities, the Australian dollar and Canadian dollar, have partially reversed its losses for the last two days.
On the other hand, at 8:30 the weekly unemployment requests are expected to be released. This indicator has been showing declining figures, outstanding asset in economy that, in turn, creates each month more jobs than last month.
Indeed, in February the ADP survey showed the creation of 216 jobs in private sector. This figure could match or approach the official data published by the Labor Department on Friday morning.
Another crucial point is the announcement concerning the monetary policy by the Bank of Canada. While the Canadian dollar has not weakened against the dollar, it is not likely to remain at current positions for a long time. The loonie is expected to decline to the area of 1.03 / 4 in the few weeks. Nevertheless, its decline depends on the behavior of the oil.