The British pound was under increasing pressure in the Japanese session falling to 1.5915 versus the greenback. The pressure on the British pound has started with the beginning of the European session when Marvin King referred to the use of a weaker British pound for increasing the exports and getting out of this recession. The dovish comments of King could contain the market sentiment again this week after last week BOE president Marvin king in front of the parliamentary committee when he said that further deposit interest rate cut might be a useful supplement. King's view looks beside further easing specially that he was one of the three opposing members who voted for adding 75bln Stg instead of just 50bln Stg to the bank buying bonds plan. So, Wednesday release of the recent MPC minutes which were much more optimistic than the market expectations and discounting showing that the decision of holding the buying bonds plan unchanged at 175 Bln Stg was unanimously was short lived. The cable could not get over 1.65 satisfied by being well supported above 1.633 for a while but after the Fed's decision release the British pound came under the pressure of the greenback which has found support from the Fed's assessment which referred to a diminishing of the recession pressure in a strong rebound after the credit crisis negative impact on the business confidence and the equities market. The assessment was cautious and in favor of keeping all the easing steps which have been taken after the crisis waiting for a solider growth can trigger jobs asking as it is still fragile and in need of the fed's reinforcement and so the Fed has expanded its MBS program to the 1Q of 2010 from 4Q 2009 as it has been.
The gold came under pressure too versus the greenback as the investors worries about the recovery have increased pushing the commodities and the energy prices supporting the greenback which got use of the falling of the stocks downplaying the inflation outlook upside risks which looked not a concern in the Fed's US assessment as the unemployment was. The gold is trading right now well below 1000$