Market Rumours

FX dealers' focus of day whether BOE to extend its asset purchase program at policy-setting meeting; views divided over BOE to expand program by how much. Barclays Capital FX strategist Masafumi Yamamoto notes be ready for GBP's spike if expansion smaller than many players' expectations of GBP 50 billion. Adds he sees 60% chance of that much of expansion. ECB to hold policy meeting as well, though Yamamoto expects no changes from previous gathering. GBP/JPY last 150.02, GBP/USD last 1.6555.

EUR falling on selling by Japanese exporters who settling accounts, speculators who decreasing EUR longs as position adjustments ahead of BOE, ECB policy meetings later in day, says senior dealer at major Japan bank. Shinkin Central Bank senior dealer Shinichi Hayashi says "it's really difficult to make bets ahead of a BOE decision because there is often a surprise from the central bank's policy setting meeting." Adds focus on whether BOE to extend its asset purchase program by GBP50 billion, but thinks that much of expansion unlikely, which would lead to spike in GBP, as some major U.S. banks' private reports show their bullish stance on UK economy. EUR/USD may fall to 1.4800 vs last 1.4840, EUR/JPY may fall to 133.00 vs last 134.44, GBP/JPY may fall to 148.00 vs last 149.67, GBP/USD may fall to 1.6400 vs last 1.6524 ahead of meeting results.