The Euro and British pound are selling off aggressively today on the heels of comments from government officials and market players.
The EUR/USD broke the 1.30 level after legendary investor George Soros said that the currency may not survive the crisis without a global plan. He is pushing for the European Union to come up with a way to deal with all of the toxic debt sitting on the balance sheets of European banks. To ask for each country to come up with its own solution is not the right solution, a regional response is needed. Earlier this morning, ECB President Trichet also said that he is not excluding cutting rates below 2 percent.
As for the British pound or GBP/USD, it has come under selling pressure on comments from UK Chancellor Darling, Bank of England Governor King and BoE member Blanchflower. This morning, in an exchange of letters Darling and King announced that the central bank is authorized to purchase up to GBP 50 billion in investment grade assets ranging from corporate bonds, commercial paper and syndicated loans. Details will be released next week. The Chancellor also talked about Quantitative Easing and how the BoE needs his written approval to use the money for Quantitative Easing which entails purchasing UK gilts. Although more stimulus should be ultimately good for the country, many investors fear that the UK could become the next Iceland.