The decision on interest rates and quantitative easing from the Bank of England has come and gone. There has not been a spectacular reaction, but the British Pound is moving higher nevertheless. The pound dollar exchange rate and the pound euro exchange rate are both slightly stronger on Thursday the 4th March. 1 GBP = 1.5070 USD while 1 GBP = 1.1051 EUR The big news today of course is the decision by the MPC at the Bank of England to maintain the status quo. Interest rates are being kept at 0.5% and the quantitative easing programme will also stay put. "The minutes of today’s MPC meeting will be published at 9:30am on Wednesday 17 March. Earlier today sterling fell after a Halifax report unveiled a 1.5% decline in UK house prices for February, the first drop in eight months," reports Anthony Grech at IG Index in London. However the exchange rate market will also be aware that the latest data on house prices is but one of many - other popular measures of house prices have produced more positive news. Also backing the UK economy today are the latest new car registration figures - sales in February were up 26.4% compared with the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT). There were 68,686 new cars registered last month and private buyers led the growth in sales. "Scrappage has generated eight consecutive months of growth," said the SMMT's chief executive Paul Everitt. The Euro Dollar exchange rate The going has been a little tougher for the Euro this morning: EUR/USD fell, as investors played it safe and held back on buying the euro against the US dollar ahead of this afternoon’s the ECB interest rate decision. The ECB is widely expected to keep interest rates unchanged at a record low of 1% and to outline the steps in its gradual withdrawal from emergency lending measures. Investors will be tuning into Trichet’s speech this afternoon to see whether there are any supportive remarks about Greece or any hawkish remarks about the region’s economy. "It could be enough of a hawkish angle to give the euro a modest boost," said Daragh Maher of Credit Agricole CIB. "If the mood regarding Greece improves further and Trichet is supportively hawkish, we will likely see the exchange rate re-test overnight highs," he said. Elsewhere, Moody’s, which has an A2 rating on Greek debt with a negative outlook, today warned that the embattled country must implement its austerity measures perfectly or else face a credit rating downgrade. Investors fear that protests in Athens may hinder the government’s austerity plan. Today’s 10-year Greek bond issue will also be closely monitored. Anthony Grech, London

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