subject: BoE Stands Ready to Respond in Either Direction as the Balance of Risks Evolved [print this page]
Fundamental Headlines
Spains' Zapatero Says Debt Crisis Is Over Wall Street Journal
Gold, Silver Hit Highs Wall Street Journal
Fed Hints it Could Buy More Bonds - Financial Times
Obama Loses U.S. Investor in Global Poll as Majority Abroad Favor Policies - Bloomberg
China Won't Let Currency Rise Soon in Global Poll Signaling No. 1 Economy Bloomberg
GBPUSD: The Bank of England released their minutes for the month of September in which Andrew Sentance continued to dissent against the majority and push for a rate hike, stating that well communicated policy is needed for higher rates. This marks the fourth consecutive month that Mr. Sentance suggested an increase in the key overnight lending rate. Indeed, the committee considered both arguments of downside and upside risks regarding inflation in Great Britain. Worth noting, policy makers said that risk to growth had fallen slightly. This comment trails recent comments by the EU in which the commission raised its growth forecast for the region to 1.7 percent from 1.2 percent for 2010. However, growth may weaken in the near term as the government implements tough austerity measures in order to battle its high budget deficit. At the same time, uncertainty about economic prospects may lead the split in the committee to widen in the upcoming months. In the currency markets, the bullish GBPUSD trend remains intact as the pair extended yesterday's advance. This comes to no surprise as the Fed said that inflation is below target and will likely remain there for some time. All in all, the GBPUSD may test 1.58 in the near term but will likely come back under pressure in the medium term.
BoE Stands Ready to Respond in Either Direction as the Balance of Risks Evolved
