Bernanke hints at end of asset purchases
20 June, 2013
Chairman of the Federal Reserve, Ben Bernanke, used his monthly statement last night to tell the world that the USA’s asset purchase prgramme, equivalent to Quantitative Easing in the UK, would start to be scaled back soon. The US Dollar, which has in recent weeks been weakening giving better rates for sending money abroad, strengthened sharply during the speech, as asset purchasing by central banks dilutes currencies and make them weaker. Rates for GBP-USD fell over a cent through the evening.
The Euro continues to sit in a tight range against the Pound, and this is likely to continue until there is some data to show whether the European or UK economies are improving. This morning at 9.30 we have UK retail sales due out, which could be one such indicator, specially given that retail sales have not been keeping up with better data elsewhere for UK plc. If we have another poor figure the Pound could fall significantly, but if high street activity has improved then exchange rates could get better. A figure of 0.2% is expected.
This morning Switzerland also kept interest rates on hold at 0%, and the only other data due out is US home sales this afternoon, although we have a speech from Bank of England committee member Paul Fisher at 2.15pm, and Eurozone consumer confidence at 3pm.
The Bank of England is showing no signs of scaling back QE, so the US statement last night shows that the economy there is likely to need less stimulus than the UK, which could strengthen the US Dollar more over the coming weeks should the new policy gain momentum.
If you are looking to send money aboard speak with one of our specialist broker’s today.
- 2020 (59)
- 2019 (190)
- 2018 (229)
- 2017 (253)
- 2016 (254)
- 2015 (253)
- 2014 (252)
- 2013 (287)
- 2012 (270)
- 2011 (576)
- Brexit deal to be done, or going, going, gone? 25 November, 2020
- Sterling starts the week down from the highs of last week 16 November, 2020
- Votes are in – albeit still being counted, will Donald trump Joe? 4 November, 2020
- No categories