Bank votes strongly against Quantitative Easing

22 November, 2012

Simon Eastman

Yesterday was the day markets had been waiting for this week as we saw the release of the Bank of England minutes from the policy meeting earlier in the month. We were looking for the split in voting, which decided against any further quantitative easing, to see whether it was a wide or tight split. The expectation for a tight vote was likely to lead investors to thinking we could see a further round in December, especially as the UK data recently has not been that positive. This should’ve in turn affected the Pound pushing it to the downside against the major currencies.

As the minutes were released it showed an 8-1 vote to hold off on QE. Some thought this would give the Pound a bit of a boost, considering the downside pressure a tight split would have brought but it wasn’t to be. The pound did very little at the release and continued to trade in tight margins against the euro but managed to make some slight gains against the US dollar.

The Euro also made gains against the dollar, but these were limited, as markets still wait for a resolution to the Greece issue. EU authorities failed to table a deal earlier in the week for Greece to get the next round bailout money. There are various deals on the table, it’s just a case of getting agreement from all parties on one of them. The meetings continue today and hopes are that they will come to some agreement by the end of the week. In the meantime, it’s likely that pound/euro exchange rates will remain largely range-bound.

Today is Thanksgiving across the pond, so while our American friends are eating their obligatory turkey dinners, trading everywhere else will continue. This could bring about some opportune buying levels for the greenback so if you are looking to send money to the USA, keep in touch with your broker here at Currency Index, as once the US are back in the fold tomorrow any gains made could be reversed.

Data wise there is some PMI data out of Europe and an industrial trends survey for the UK. Over in Canada retail sales are released after lunch. SO with little else to focus on, eyes will be on the EU ministers and any newsfeeds coming from Brussels.