The pound fell on Thursday, retreating from initial gains made against the dollar after the central bank held interest rates at 0.5%, as political economic concerns kept the UK currency under selling pressure.


Meanwhile, the euro lost ground as the European Central Bank, as expected, left its main lending rate on hold at 1%. After its policy meeting Jean-Claude Trichet, ECB president, claimed the eurozone recovery, while on track, remained ‘fragile and uneven’. With the eurozone price pressures remaining subdued and monetary growth set to remain weak, there was little prospect of a rate rise.


Elsewhere yesterday the dollar continued to gain support on lingering concerns over Greece’s fiscal problems and anxiety over today’s US jobs report.
This morning sees the yen weakening for a second day against the dollar and declining against the euro on speculation the Bank of Japan will step up credit easing measures to stave off deflation.


Today’s non-farm payrolls release is likely to be brushed aside as investors view the release with some trepidation, poor weather conditions across the United States are expected to have a negative influence over today’s data.