British Pound Sterling | Currency News Views and Outlook

British Pound Sterling: Currency fins support vs EUR and USD as Miles says QE in February is not a given

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Category: British Pound Sterling

Published on Monday, 30 January 2012 10:05

Written by Super User

The majority of analysts we are following are forecasting further quantitative easing (QE) to take place in February.

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British Pound Sterling (GBP) in US Dollar (USD): GPBUSD is 0.39% lower at 1.5665.

British Pound Sterling (GBP) in Euro (EUR): GBPEUR is 0.3% higher at 1.1935.

British Pound Sterling (GBP) in Australian Dollar (AUD): GBPAUD is 0.69% higher at 1.4869.

This morning sees the FTSE 100 head lower, the commodity currencies have followed suit, hence the weakness in the Australian dollar. This riskier euro is also heading lower as investors contemplate just how challenging the Greek situation continues to be.

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Looking at the sterling, there was some support from Bank of England MPC member Miles who said it is "presumptuous" to conclude that another round of QE in February is inevitable.

Indeed, the majority of analysts we are following are forecasting further QE to take place in February.

Miles said the decision will hinge on the forecasts contained in the quarterly inflation report.

Nevertheless, he did acknowledge that CPI has been on a "pretty steep" downward trajectory recently.

As mentioned the Australian dollar is lower in line with softer markets this morning, but, there is the additional news that Fitch put a number of Australian banks on ratings watch negative.

Although the initial reaction was muted, investors will be grappling with the full implications this morning.

Moody’s said the divergence between Japan’s actual fiscal position and its deficit reduction goals could widen further, adding that the risk of a crisis would rise if credible fiscal action is not taken.

Prime Minister Noda said Japan is already helping Europe by buying EFSF bonds, and will continue to do so.