US Fed chief Ben Bernanke last night cut interest rates more than expected to between 0% - 0.25%. The dollar fell back on the news against most majors. Bernanke is recognized as an expert on the 1930’s depression and has unleashed all his armour in the fight against the recession.
The much talked about “quantitative easing” a monetary policy tool used by the Japanese in the 90’s during their fight against deflation is now centre stage as interest rate setting policy at almost 0% gives the Fed no further scope to cut. The Fed are likely to flood the US with money in order to keep the economy moving. I would imagine that US government debt by way of T Bonds will be purchased by the Fed in order to print more money.
This morning see’s the release of the Bank of England MPC minutes. They are likely to show a unanimous vote in favour of the rate cut at the beginning of the month and further easing of monetary policy.
The Euro has been one the major beneficiaries overnight and dragged Sterling to a new record low as traders buy back the euro on widening interest rate yield differentials. This is profit taking for Christmas bonuses in my opinion.
For property investors or for investors generally the pick of the crop are the Istanbul 5 year rental properties available from £62,950 with a 5 year rent guarantee at 9.5% per annum and investors can buy in Sterling not Euros.
Current interbank prices area as follows:
GBPEUR: 1.1060
GBPUSD: 1.5623
GBPDKK: 8.2130
GBPSEK: 12.2450
GBPCHF: 1.7375
GBPZAR: 15.5485
GBPJPY: 138.14
USDEUR: 0.7069
GBPAUD: 2.2434
GBPNZD: 2.6739
GBPCAD: 1. 8703
Clients and agents should contact Girasol at istanbul@girasolhomes.co.uk
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