Thursday, May 7, 2009

ECB Rate Cut and more Easing out of England

Today, the European Central Bank continues toward ZIRP with dropping overnight lending rates to 1%. The Bank of England has announced another 50B GBPs of quantitative easing (in addition to 75B GBPs before), and maintained thier overnight rate at 0.5%.

Both of these would be favorable developments for the value of the U.S. dollar on world markets, but tempered by the fact of our own quantitative easing underway. There was a mild spike in the value of the euro vs. the dollar today, probably from those investors who regard this sort of intervention as a favorable development, and no changes of significance with the pound.

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