The ECB's rate decision, at 1145 GMT, and press conference, at 1230 GMT, give EUR/USD short-term upside potential, says Dresdner Kleinwort. However, the bank doubts upside momentum will last into the evening, ahead of the long U.S. weekend and the looming G8 summit between July 7-9. Says it would take profit on longs around 1.59 as speculation about forex intervention will run high on any subsequent rallies, and could trigger some brutal moves. EUR/USD now at 1.5880.
The impact of surging oil prices on U.K. consumers is very worrying, U.K. Prime Minister Gordon Brown said Thursday.
"I understand the pressures that people face and I'm very concerned about the impact the high petrol price has on people's ability to meet their weekly costs," Brown said in response to questions from lawmakers.
The U.K. inflation rate rose to 3.3% in May from a year earlier, the highest annual increase in more than a decade. Last week, Bank of England Governor Mervyn King warned that inflation would likely rise above 4% later this year, double the bank's target rate.
Brown stressed that although he believed the U.K. economy was more resilient than when it faced previous oil shocks, he repeated that efforts should be made to increase oil production and find alternative sources of energy.
Crude oil futures chalked up fresh record highs Thursday, with Brent August crude futures hitting $146.69 a barrel.
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