All Eyes On The BoE
All eyes are on the BoE today, the final day of the MPC's two day meeting to decide "what the hell do we do next".
Whilst nobody seems to be anticipating anything other than interest rates being left alone at 0.5%, there are plenty who think that an increase in QE could be announced.
If they do opt to extend QE from the GBP175 billion already spent, an increase of GBP25-50 billion seems to be most likely. Last month's poor GDP figures, leaving Briton as the only major economy still officially mired in recession, might just tip the scales in favour of an increase.
If that happens, then we can expect the pound to have another dose of the collywobbles later today.
Sit tight, the announcement is expected around 12.00 noon.
Meanwhile the US Federal Reserve announced last night that they are likely to be keeping interest rates close to zero for some time yet. That was widely expected, but what wasn't was the news that they are to scale back slightly on it's planned asset purchases by $25 billion.
To me this looks like the first tentative steps towards trying to let the US economy stand on it's own two feet. If we extend QE here today, whilst America are reigning it in slightly you could certainly make out a case for the pound to weaken quite sharply against the dollar.
The ECB are also due to announce a decision on interest rates later today. As with the others nobody is expecting a change on rates themselves, it's the fine tweaks here and there, and the language used in the announcement that everyone will be scrutinising.
Whilst nobody seems to be anticipating anything other than interest rates being left alone at 0.5%, there are plenty who think that an increase in QE could be announced.
If they do opt to extend QE from the GBP175 billion already spent, an increase of GBP25-50 billion seems to be most likely. Last month's poor GDP figures, leaving Briton as the only major economy still officially mired in recession, might just tip the scales in favour of an increase.
If that happens, then we can expect the pound to have another dose of the collywobbles later today.
Sit tight, the announcement is expected around 12.00 noon.
Meanwhile the US Federal Reserve announced last night that they are likely to be keeping interest rates close to zero for some time yet. That was widely expected, but what wasn't was the news that they are to scale back slightly on it's planned asset purchases by $25 billion.
To me this looks like the first tentative steps towards trying to let the US economy stand on it's own two feet. If we extend QE here today, whilst America are reigning it in slightly you could certainly make out a case for the pound to weaken quite sharply against the dollar.
The ECB are also due to announce a decision on interest rates later today. As with the others nobody is expecting a change on rates themselves, it's the fine tweaks here and there, and the language used in the announcement that everyone will be scrutinising.