BOE’s last rate hike was not justified. There was an inflationary pressure for sure, but the rate hike was not necessary.Therefore, that rate hike caused the following impact :

Rate hike —> influx of capital —> rise in the value of currency —> cheaper imports and fall in exports —> lowering demand —> fall in growth rate —> reduction on inflationary pressure —> rates cuts.BOE is at the end of this cycle and FMI-Team expects the interest rate to remain unchanged at least till February 2008.

FMI-Range GBP/USD 2.0250 to 2.0690

What’s up with EURO : Unchanged rate ? Yes indeed, a smart move!
European Union decision to keep the interest rate unchanged, was predictable and a stable move.Above cycle explains that Euro has peaked and cannot sustain growth at this valuation. Growth is robust, still at this interest rate, the economic growth is not sustainable.

Trichet’s comments were hawkish about the rate hike, however, it seems that, in globalization of economies, internal factors within the union are important, but external factor like Interest rate in England, USA, Canada needs to be given due consideration.FMI-Team expects that, the interest rate will remain unchanged till February 2008 and any hike will be based on the upcoming economic data.

FMI-range EUR/USD 1.4450 to 1.4840 forexmetrics.com

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