Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (1269)	10/4/2007 7:23:07 AM
From: RockyBalboa	Respond to of 71409

UPDATE: Bank Of England Holds Rates Steady For Third Month Thu, Oct 4 2007, 11:18 GMT djnewswires.com UPDATE: Bank Of England Holds Rates Steady For Third Month By Simon Kennedy LONDON (Dow Jones) -- The Bank of England held its main interest rate steady at 5.75% Thursday as it continued to look for signs that the recent credit market turmoil may be slowing down the wider economy. It was the third pause in a row from the U.K. central bank and was also the first decision on rates since the Northern Rock banking crisis erupted in mid-September. At its previous meeting in September, the bank's rate-setting Monetary Policy Committee voted unanimously to hold rates steady after judging that the turmoil in the credit markets had left a more uncertain outlook on inflation. There have been some signs since that the tight credit conditions are starting to relax, but interbank interest rates still remain at historically high levels compared to the central bank's base rate. The credit crunch and the resulting crisis at Northern Rock, which sparked the first run on a U.K. bank in 140 years, has increased market expectations of a rate cut in the coming months, though commentators are divided over the best course of action for the Bank of England. In a note published before the decision, analysts at Charles Stanley said the Bank of England should follow the Federal Reserve's lead in cutting rates. "The bank has been forced into more about-turns than an exuberant dancer at a summer music festival and has now ended up in a knot, in a heap and on the floor," the broker said. "A deliberate attempt to 'get ahead of the curve' and stay there is essential if money market premiums are not to resurface again at the end of the year. "This means that developed market central banks need to act now, they need to act aggressively, they need to act decisively and they need to stand prepared to act again if necessary," it added. Lloyds TSB's chief economist Trevor Williams, on the other hand, argued that the Fed's actions haven't significantly improved credit market conditions and that an immediate U.K. rate cut therefore isn't the solution. "Despite the cut in interest rates of 0.5% to 4.75% and the addition of substantial liquidity, the U.S. interbank market remains frozen," Williams said. Williams did, however, suggest a rate cut could be on the way early next year as wage inflation is low and could be kept under pressure by an economic slowdown in 2008. "This will likely convince the MPC to cut interest rates in 2008, perhaps as soon as February," he added. Data in the run up to the decision were also mixed. A reading on manufacturing sector activity in September fell to 55.1 from 56.1 the previous month, well below consensus expectations. In contrast, the reading on output prices rose to a record high. "The strength in output prices is likely to cause some concern for MPC members, although it is important to stress that the prices balance tends to follow activity, so if we are right in the view that the manufacturing sector will slow, the pressure on prices should ease," said UBS economist Amit Kara. (END) Dow Jones Newswires October 04, 2007 07:18 ET (11:18 GMT)

To: Real Man who wrote (1269)	10/4/2007 7:52:05 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 71409

ECB Leaves All Key Interest Rates Unchanged Thu, Oct 4 2007, 11:48 GMT djnewswires.com ECB Leaves All Key Interest Rates Unchanged FRANKFURT (Dow Jones)--The European Central Bank kept interest rates on hold Thursday, leaving the key policy rate unchanged at 4.00%, as expected. The ECB didn't provide any rationale for the decision, but ECB President Jean-Claude Trichet will comment on the governing council's policy meeting at a press conference in Vienna set for 1230 GMT. The 53 economists canvassed by Dow Jones Newswires unanimously expected the ECB to keep its key refinancing minimum bid rate unchanged Thursday. The ECB has raised its rates eight times by 25 basis points since December 2005. ECB-watchers expect Trichet to emphasize the council's focus on inflation - making it clear that while policymakers have no plan to raise rates yet, there is also no plan now to cut interest rates. Observers will also be interested in what comments Trichet might make about the acceleration in the euro zone's inflation rate, to 2.1%, at the press conference. Since February, the ECB has said inflation will accelerate in the latter months of the year due to volatile oil prices, both last year and this year. It is unclear whether the ECB has anticipated, or is concerned about, the possible strength of the acceleration. ECB staff projections project euro-zone inflation to average around 2% both this year and in 2008, however oil prices are higher now than at the time of the projections. The ECB defines price stability as an inflation rate just below 2%. Trichet is likely to reaffirm the ECB's primary goal of price stability and the ECB's readiness to act in a firm and timely manner to ensure risks to price stability don't materialize. This reassurance will be important to keep inflation expectations in check. The ECB routinely reiterates its policy horizon is for the medium- to longer-term. In September, the ECB said it will assess further economic data before drawing any policy conclusions, given a "high level of uncertainty" resulting from financial market turbulence. Market participants will likely keep an eye out for any guidance from Trichet as to whether the ECB expects market uncertainty to ease or remain elevated over the coming months. They note that the strength of the euro's appreciation against the dollar in recent weeks is equivalent to tighter monetary policy, and will be listening closely for any verbal intervention by Trichet to halt the euro's climb. The euro hit a record high against the dollar of $1.4283 Monday, partly a reflection of the narrowing interest rate differential between the two currencies since the U.S. Federal Reserve cut its key interest rate last month. At 1147 GMT, the euro was trading at $1.4111. Most economists surveyed by Dow Jones Newswires expect the ECB to keep rates unchanged through the first half of 2008. The council's next policy meeting is scheduled for Nov. 8. -By Monica Houston-Waesch and Roman Kessler, Dow Jones Newswires; +49 69 29 725 520; nikki.houston@dowjones.com (END) Dow Jones Newswires October 04, 2007 07:48 ET (11:48 GMT)