Both Bank of England (BOE) and The European Central Bank (ECB) decided yesterday to keep interest rates at a record low of 0.5 %. BOE also affirmed to continue bond buying at its present level of 375 billion pounds (USD 571 billion). ECB President Mario Draghi likewise hinted not to tighten monetary easing until well into 2014.
Before the ECB meeting the Euro fell from a six-week high of 1.3345 on Wednesday. The Euro fluctuated between 1.3345 and 1.3228 and trades now at 1.3225. EUR/ GBP advanced for the first time in eight days after a gauge in UK's July manufacturing. The Swedish Krona slumped on a report that factory activities were slowing down.
USD/JPY fell on bond flows. Data showed that Japanese investors the previous week sent record-high funds into foreign bonds for a fourth consecutive week. USD/JPY trades on 99.38 after the Central Bank decisions. Asian shares climbed on better than forecast Chinese manufacturing data. The Australian Dollar slipped to its lowest in three years on bets that the Australian Reserve Bank will cut interest rates next week.
Both oil and commodity prices went steeply up before the Central Banks met. Brent crude jumped two Dollars to above USD 109 a barrel, but has since fallen back to USD 107.70. Copper rose 1 % on signs of modest growth in the global economy. Before Central Banks decisions this week, most investors expected no major changes in policies or forecast for interest rates. The final decisions confirm their outlook. Currencies remain steady with GBP and JPY losing some ground.
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BOE, ECB Keep Rates At 0.5 %
Published 08/02/2013, 01:02 AM
Updated 07/09/2023, 06:31 AM
BOE, ECB Keep Rates At 0.5 %
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