Financial Markets Review

The pound’s recent rally was abruptly ended by the latest Bank of England Inflation Report (QIR), outweighing some slightly better than expected UK economic data.

 

 

BoE prepares for more rate cuts and quantitative easing

 

The pound’s recent rally was abruptly ended by the latest Bank of England Inflation Report (QIR), outweighing some slightly better than expected UK economic data.

 

The worst performer in the G10 was the Swedish krona after the Riksbank cut interest rates to 1%. In emerging markets, the top performers against the US$ were the Chilean peso and Russian rouble.

 

US economic data was overshadowed by record treasury auctions and events in Washington where Treasury Secretary Geithner presented a comprehensive financial rescue plan to remove distressed assets from bank balance sheets.

 

The FTSE-100 closed below 4,200. The Dow slipped back below 8,000 on concerns about the lack of detail in the new US financial rescue plan. Gold prices hit a high of $952.

 

Full Report

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