Overnight the Bank of England announced UK interest rates will remain at 0.5 percent for the 7th consecutive month. Although leading data shows solid signs the local economy is heading back into the black, the bank also indicated the continuance of the quantitative easing program of which GBP175b will be pumped into the economy, with the remaining GBP50b to be completed in the next month. In the volatile minutes after the decision, the pound lost ground against the USD as investors second guessed just how slow and protracted the recovery will be.
As widely expected The European Central Bank Monetary Policy Committee decided to leave its interest rates unchanged at 1.0%. ECB President Jean-Claude Trichet indicated interest rates would remain at current levels in the near term and once again warned of the implications of excessive volatility in the currency markets.
The US Dollar continued its horror streak overnight as US equity markets found strength on the back of an unexpected profit from Alcoa Inc. which kicked off earnings season in states last night. Commodity markets latched on to the latest burst of optimism with Crude Oil for November rising $1.71 to close the session at US$71.30. A primary beneficiary was Gold which showed no signs of slowing, touching all times highs of US$1062 overnight.
The Aussie dollar can't put a foot wrong, drawing strength from the surge in commodities with the hype of yesterdays Jobs figures still at the forefront of investor's minds. The Aussie extended yesterday's gains overnight, threatening to hit $.9100. The Aussie dollar is currently trading at $.9055 retreating from the overnight highs of $.9090.