SubscribeDaily Futures Commentary August 6, 2009
Thursday, August 6, 2009
September British Pound futures are trading sharply lower following a surprise announcement by the Bank of England to boost asset purchases by 50 billion pounds.
This move was unexpected by both analysts and traders and it represented concerns that the current recessive economic conditions in the U.K. will continue.
Before today’s meeting, the September British Pound was in the midst of a strong uptrend, even posting a new high for the year yesterday. This rally was being driven by speculative traders who believed the BoE was going to announce a temporary end to its 5-month asset buyback program. Although analysts were split as to whether the BoE would continue to the program or halt it, most were surprised when the BoE voted to increase the amount of money available for the program to continue.
In its announcement just a short time ago, the Bank of England’s monetary policy committee announced that interest rates would remain at 50 basis points. In its statement it cited that this rate was appropriate in order to maintain its annual consumer price inflation target of 2%. The BoE …
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