The latest UK bank bailout package gives the Bank of England the authority to buy up to GBP 50 bln in assets, in essence joining the Fed in quantitative ease, or credit ease, as the Fed dubs it.
Like the dollar before it, the pound has come under pressure with the news. We trade at session lows of 1.4553 after reaching 1.4909 overnight.
Shareholders will be heavily diluted via this scheme prompting a very sharp drop in shares of RBS today. RBS is down an astounding 58% today.
1.4470/75 is very important support near-term with trend lows at 1.4356 just beyond.
