Forex Flash: Quiet European week ahead - BTMU

Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that it looks like being a relatively quiet week in Europe, with the Eurozone PMI surveys for February the main economic data release ahead of the Italian elections beginning at the weekend which should favour a more stable Euro.

In the UK, the release of the latest BoE minutes could prove interesting as they will shed more light on whether the MPC is united behind its shift to a more flexible inflation target. He feels that there is a risk that some less dovish MPC members may display concern over tolerating a longer inflation overshoot. he writes, “The policy shift has served to further undermine near-term sentiment towards the pound, with the latest IMM report revealing that speculative net short pound positioning increased sharply last week to its highest level since June 2012.”