BoE minutes: MPC voted unanimously to hold QE
Following yesterday’s data release showing CPI in the UK falling to 2.5%, The Bank of England Monetary Policy Committee (MPC) voted unanimously for unchanged asset purchases. The policy-makers were unanimous in voting to keep interest rates on hold at 0.5 percent and the asset purchase total unchanged at 375 billion pounds in September.
Meanwhile in Germany, the ZEW survey revealed a stronger than expected economic sentiment figure yesterday, however the euro took moderate losses over the course of the day, after hitting four-month highs against the USD and JPY earlier in the week. In the Asian market, the Bank of Japan surprised the market by announcing another round of easing – and a fairly substantial one at that. The lifetime of the Asset Purchase Program was extended by 6-months and its size was increased by JPY 10 trn. The increase is to be evenly split between JGBs and T-bills, and the BoJ now hopes to hit the new higher APP target of JPY 80 trn by end-2013.
On the FX market GBP USD is firmly trading at a range of 1.6232-16271. Today, a batch of US news is likely to generate substantial volatility in the marketplace. The markets will be paying attention to the Building Permits and Existing Home Sales figures. If either of them comes in higher than expected, the dollar could see gains against the euro and sterling.
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