Sterling slipped down after Posey on speed QE!

It was a very nervous day for the pound, with a slight strengthening in the beginning to touch 1.59 after a very decent report, the retail sector from the CBI. However, comments Posey hit hard by the pound, dropping the cable to 1.5720, the time when the dollar was just beginning to weaken. Sterling was one of the weakest among the major currencies yesterday (except U.S.) - EUR / GBP touched 86.0, a four-month high. Euro remains in good shape, despite the ongoing suffering of Ireland, Portugal and others. Compared with the problematic dollar, the euro rose to a five-month peak in 1.36, thanks to the continued support of Asian central banks diversifying their reserves against the dollar. Since the beginning of the quarter the euro gained 11% against the dollar and 5% to the pound.



Posen has called for additional mitigation. Independent member of the Monetary Committee of the Bank of England Posen was a cat among the pigeons yesterday by suggesting "the need for further monetary easing, and that coordinated global quantitative easing (QE) will be more influential than individual actions. It was a very dovish speech, suggesting that additional QE must begin with the purchase of government gilts, but then may be extended for the purchase of private assets. Posen appealed not only to make additional purchases of government bonds (rejecting fears of currency depreciation), but also recommended the purchase of private assets, which looks like a high-speed QE. Radical, yes, and it was not surprising that sterling was so scared. I wonder, could he make such comments after controlling BOE King? Someone says it's not. It is noteworthy that later we saw the performance of the chief hawk in the Monetary Committee, Andrew Sentance, he said that there was no need for further QE.

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