ECB to cut rates?

Foreign Exchange - Pounds Sterling and Euro Exchange Rate Outlook

Bloomberg reports that ECB policy members are already clashing over asset purchases less than a week after Trichet "engineered a truce." Slovenia's Kranjec said "the ECB is 'likely' to spend more than the €60 billion buying euros bond purchases and hasn’t ruled out acquiring corporate bonds and commercial paper. Hours later Germany's Axel Weber, who had already said there’s 'no need' to buy euros or any other assets, insisted 60 billion euros is the 'maximum.'"

Former BoE policy member Buiter said the €60 billion is "peanuts," anyway, for an economy the size of the eurozone’s.

Of course it will need more.

But Weber is opposed and also opposed to a further cut in rates under the 1% "floor," although others say nothing should be ruled out (the Cyprus central bank chief). But Weber is more equal than the others. Germany has more weight than Slovenia and Cyprus combined, or many others combined, maybe all the others combined as long as Trichet seeks unanimous agreement.

Pounds to US Dollars = 1.5230
Pounds to Euros = 1.1158
Euro to Pounds = 0.8957
Pounds to Australian Dollars = 1.9999

Bye For Now

Barbara Rockefeller
Foreign Exchange Trading
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