Highlights:

@17:11: Pound undervalued against Euro 

@14:13: Can GBP look forward to a future free of quantitative easing?

@12:00: No change at Bank of England

18:00: Outlook for GBP tomorrow

@ 9:30: Consumer Inflation Expectations, released by Bank of England
@ 9:30: The trade balance released by the National Statistics is a balance between exports and imports of goods A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the GBP. Consensus is for -3BN GBP.
@ 13:30: Nonfarm Payrolls (May). This is one of the biggest events on the calendar for financial markets. Consensus is for 170K extra people in work.

17:11: Pound undervalued against the euro say TD Securities

  TD Securities have issued their Global Markets forecasts for June. They believe the pound sterling's period of underperformance is due to come to an end. Gains are seen against the euro. Read the article here.

15:46: GBP’s current level "is quite ideal"

  As we say goodbye to Mervyn King we ask - where would Mark Carney like to see the British pound?

 According to Stephen Gallo at BMO Capital Markets the UK currency is in fact at a good valuation:

 "We believe that the GBP’s current level is quite ideal for the Bank (i.e. below average but still above its post-ERM lows in nominal effective terms) and also serves as an indication of “neutrality” for the time being.

 "The MPC is likely to be in “caretaker mode” at present given the impending handover of authority and, in that vein, given the fact that excessively weak or strong levels of the GBP could potentially make that transition less smooth. Along these lines, recent dataflow and the Bank’s fair bit of dependence on the outcomes from FLS argue for a GBP level that is neither overly reflationary nor overly deflationary at this stage."

14:13: A future without quantitative easing?

  The July MPC meeting at the Bank of England could offer more interest to central bank watchers. But don't count on it. It seems the spectre of further money printing is fading. An undoubtably positive scenario for sterling!
See our latest views on the matter here. 

13:41: GBP remains on the front foot

  The BoE was a non-event for sterling - at present the ECB President Draghi is talking to the press. He assures markets that the ECB will remain as accommodative for as long as possible. Little by way of currency reaction though, GBP-EUR is unmovable at present. A look at the spot rates shows:

The GBP-EUR is flat at 1.1763.
The GBP-USD is 0.33 pct higher at 1.5458.
The GBP-AUD is 0.7 pct higher at 1.6262.
The GBP-CAD is 0.17 pct higher at 1.5968.

Please Note: The above are spot market quotes to which your bank will add a discretionary spread. However, an independent FX provider will guarantee to beat your bank's offer, thus delivering more currency. Please learn more here.

12:00: No change at Bank of England

  The Bank of England voted against restarting its bond buying on Thursday and left interest rates at a record low, bringing to a close Governor Mervyn King's final Monetary Policy Committee meeting.

 

The decision to leave policy unchanged before the arrival next month of King's successor, former Canadian central bank chief Mark Carney, was widely expected by economists, as recent data suggests Britain's recovery is gathering strength.

11:10: GBP-EUR boosted as German Factory Orders slump

  German April Factory Orders data disappoints after dropping 2.3 pct. Expectations were for a 1 pct decline.

 "German factory orders closely correlated with EUR-GBP - nice slip there," say WorldFirst.

 The pound to euro exchange rate has jumped to record gains of 0.14 pct and is at 1.1783. 1.18 draws ever closer.

10:40: The ECB meeting is the one to watch

 While the Bank of England MPC meeting is of course always of interest today's is likely to be a bit of a snore-fest. It will be the meeting at the ECB that will be the one to watch; particularly for the euro pound exchange rate. A host of analysts are tipping the euro for strength - see their views here.

10:07: Can GBP-AUD crack this critical level?

  The British pound has staged a fresh advance against the under-fire Australian dollar overnight, it appears that the momentum rests with the pound. However, as we note here, current levels have proven a tough nut to crack in the past.

9:25: Good news on the housing front

  Further good news on the economic front this morning after it was shown that British house prices grew by an annual 2.6 pct in the three months to May, the biggest rise since September 2010, mortgage lender Halifax said on Thursday.

House prices rose by 0.4 pct in May alone, faster than the 0.2 pct increase forecast by economists polled by Reuters, though down from the 1.1 pct rise recorded in April.

Sterling will continue to find support as analysts are met with these signs that the UK's economic and financial position is improving.

8:10: Exchange rates at the market opening

 The British pound sterling (Currency:GBP) looking in firm today - yet more advances against the US dollar and Aussie and comfortable levels against the euro:

The pound to euro exchange rate is unchanged on Wednesday night's closing rate at 1.1769.
The pound to US dollar exchange rate is 0.21 pct higher at 1.5438.
The pound to Australian dollar exchange rate is 0.82 pct higher at 1.6281.

8:00: The agenda for sterling today

 Sean Callow at Westpac Economics in Sydney tells us what will be of concern to currency traders in the European session:

"There should be limited tension over the Bank of England MPC policy decision, with the base rate to be kept at 0.5%, the asset purchase program at GBP375bn. Next month should be more interesting when Mark Carney takes the reins.

"The ECB meeting is always a potential market-mover, given the lengthy press conference. Official commentary suggests substantial division among ECB members, making unlikely any agreement on further policy steps as soon as today. But the media should ask about negative deposit rates and another rate cut, so EUR price action could be whippy. German factory orders are also on the slate."