GBP/USD settled lower waiting for the MPC policy meeting

EUR/USD

The pair finished the session in minor negative territory, as market participants reacted to the comments from ECB's Coeure and Asmussen, who noted that the ECB should look into publishing minutes, and also looked forward to the upcoming governing council meeting later on this week. While the ECB is widely expected to keep the benchmark borrowing rate unchanged, Draghi will be expected to provide more clarity on the forward guidance, by potentially hinting on the metrics that the ECB will be using to judge when the commitment to low rates needs to come to an end. There was little in terms of fresh EU related macroeconomic news flow, but German finance minister Schaeuble has ruled out another debt write-down for Greece. Schaeuble added that the country will receive aid beyond 2014 as needed if it fulfils conditions.

GBP/USD

The pair settled lower and largely mimicked the price action of its major counter-part EUR/USD, with market participants also awaiting the outcome of the MPC policy meeting, which may finally feature a statement regarding forward guidance. In terms of UK related macroeconomic newsflow, EY Item Club noted that he UK was finally on a path to sustained growth and expects a 1.1% expansion in the economy this year followed by a 2.2% increase in 2014. Also, the Item Club now expects the Bank of England’s benchmark rate to stay at 0.5% for an additional year than was forecast in its spring outlook.

USD/JPY

Cautious sentiment ahead of a number of risk events which includes the monthly jobs report from the BLS, ECB governing council meeting, as well as one by the MPC of the BoE, supported demand for safe-haven products which in turn meant that the pair settled the session in minor negative territory. In terms of Japan specific news flow, BoJ's Kuroda said that he believed the economy would not suffer a significant setback should the tax be doubled to 10% as planned, in two stages beginning next April. A final decision on whether to go ahead with the first step, a hike from 5% to 8% must be made by October. Some advisers and members of the ruling party have urged to either to postpone the increase or to reduce its scale.