FOMC Extends Asset Purchase Plan ~ forex trading tax in uk
| The Federal Reserve left interest rates unchanged as largely anticipated at 0%-0.25%, announcing that the decision was unanimous and deems current economic conditions to likely warrant exceptionally low levels of the federal funds rate for an extended period. The Fed said that "information received since the FOMC met in June suggests that economic activity is leveling out" and that "conditions in financial markets have improved further in recent weeks". The Fed extended its asset purchase plan, which was set to expire in September, saying "the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October". Sterling Recovers The sterling rebounded in the New York session after sliding to a two-week low overnight at 1.6394 following the Bank of Englands quarterly inflation report. The BoE expects inflation to fall short of its target over the next three years, with Bank Governor King anticipating inflation to ease to 1% and remain beneath the 2% target until 2012. King explained the BoEs move to increase the asset purchase plan by 50 billion pounds, saying the move was to preempt a prolonged period of below-target inflation. King said the BoE is "determined to bring inflation back to the target and its that which led the Bank to take action", adding that the UK economy will be in a difficult position for some time to come. Lastly, King said the policy of asset purchases will continue until there are nascent signs of money growth and nominal spending in the economy recovering. Cable edged back above the 1.65-figure to 1.6530, with resistance seen at 1.6560 and 1.66. Subsequent ceilings are eyed at 1.6640, backed by 1.6670 and 1.67. On the downside, support starts at 1.65, backed by 1.6450 and 1.64. Additional floors will emerge at 1.6375, followed by 1.6340 and 1.63. | ||
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