With uncertainly floating around the UK over what might happen with the interest rate, GBP took a dip which is not helped by the fact that it is looking more and more likely that the interest rate will only be raised towards the end of next year and not in the middle of 2015 as initially thought. We also saw figures yesterday that indicated that mortgage approvals have fallen to the lowest level in 14 months for England and Wales. The biggest knock to GBP might be, though, that Fed’s decision to finally halt QE in the United States.
The Eurozone was even more uneventful – swung about by the dollar (mostly) and pound, it’s been a case of waiting for the other two measures (along with buying covered bonds) the Eurozone leaders are looking to implement to save the day. These will be an asset backed securities programme, and fixed rate loans for banks.
From the States yesterday we saw news that the Federal Reserve would finally bring some closure to the QE they’ve had in place for some time now. At its peak, we saw about $85Bn being injected into the US financial system a month – now, it can be surely seen as a massive vote in confidence in the state of the US economy.
Elsewhere, NZD took a 2% hammering after the Fed’s announcement – the New Zealand Reserve Bank Governor then announcing he’d keep interest rates on hold (3.5%).
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