They did however indicate that another cut in the short term was unlikely, citing a rise in equities prices and a fall in the exchange rate should help to shore up activity.

As a result of better than expected data out of the UK earlier in the week, the market drifted away from fully pricing in a cut in UK rates, and sterling softened slightly after the announcement at noon yesterday.

However a late sell-off of the Dollar saw sterling strengthen breaching the 1.7800 level against the buck, but weakened further against the single currency, as the pound lacked independent direction.

The Dollar slid again on the exchanges yesterday, ahead of today’s key non-farm payrolls data, next week’s FOMC meeting and as pessimism over the Euro continues to diminish as growth prospects strengthen in the Euro-Zone.

The Dollar fell to two month lows versus the Euro as short-term investors unwound long-dollar positions ahead of today’s data release. Analysts expect to see the creation of about 180k new jobs in July.

There were no surprises from the European Central Bank, as they left rates on hold yesterday at 2% for the 26th month.

The Yen weakened across the board yesterday, as opposition to the reform bills continued, sparking fears of a snap election in Japan. A rejection of the bill to privatise the nations postal system, would be considered tantamount to a vote of no confidence. A ‘no’ vote could trigger a knee-jerk selling of the yen.

Elsewhere, European equity markets fell lower yesterday witnessing profit taking ahead of today’s US non-farm payrolls. Wall Street also ended lower yesterday after disappointing retail sales from many US companies. Profit taking also pushed the Nikkei lower.