Release Explanation: This release includes commentary on market developments and monetary policy operations, along with reports on a range of domestic and international economic issues, market research, and market analysis.
Trade Desk Thoughts: In the previous quarter, U.K. residential mortgage backed bond markets may remain shut throughout the rest of the year. This is mainly due to banks having to regain their footing amid the large losses they have faced.
Meanwhile, the average asking price for a home has declined 9 percent this month from one year earlier. Buyers are struggling just to be able to obtain a home loan as the economy heads towards the worst contraction seen in the past 30 years.
The Bank of England has lowered the benchmark interest rate to 0.5 percent and has started to print money in order to buy gilts and other assets in order to revive the economy and prevent the escalation of deflation. The Banks forecasts of economic growth also suggests the recovery will not resume until the second quarter of 2010 while they expect to slow to 0.3 percent in the early part of 2011.
Forex Technical Reaction: After starting the new trading week with a 45 pip gap the pair then fell an additional 60 pips before recovering to the open price at 1.3966.