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Wednesday, August 09, 2006

EUR/GBP: Possible Reversal

The past day has revealed the current thinking of two of the world's major central banks, the Bank of England and the U.S. Fed. Yesterday's Fed decision was very much in keeping with market expectations and left currencies, after a lot of volatility, largely unchanged. The follow-up commentary was balanced, data-dependent, and slightly dovish. Essentially, the FOMC feels that past rate moves and slowing growth will contain inflation, though they are ready to act in coming months, if necessary. Key phrases from the statement included: Read More....