Austria’s central bank head Nowotny says lower inflation expectations should open room for interest rate policy. Inflation expectations are going down quite substantially, he says while noting the need for downward revisions to 2009 GDP projections.
After a dovish BOE inflation report, the market expects significant cuts fro both the principal central banks in Europe.
Also crossing the wire is news that the Russian stock exchange will close until tomorrow, upping risk aversion.
A 1.5200 barrier is under attack in GBP/USD as we write.
