The US dollar surged and hit three-month highs against a basket of currencies as central bankers in the US appear concerned that open-ended asset purchases will leave its economy with long-term scars. The latest UK public borrowing data will be published and will probably accelerate losses for the pound if the figures raise concern amongst investors about next month’s UK budget update; increasing fiscal policy risks at a time where UK monetary policy worries are creating panic among traders exposed to the pound. The US dollar also jumped to one-month highs against the euro with traders likely to maintain that momentum in favour of the US currency should PMI surveys from Europe fail to maintain hopes the eurozone economy is over the worst of its economic recession.
Sterling
Minutes from the Bank of England left the British pound in tatters after it emerged that Governor Mervyn King had unsuccessfully led a small minority in the Monetary Policy Committee looking to restart money printing, which caught markets by complete surprise. Notes from the MPC’s February meeting showed King wanted to pump another £25 billion into the fragile British economy and that policymakers had considered...
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