Stock Market Today

— Sterling at new eight-month low against dollar after downbeat BOE minutes

— Minutes raise prospect of additional quantitative easing

— Other major currencies trade in narrow range ahead of U.S. Federal Reservedecision

— Emerging industry currencies suffer as traders steer clear of riskier bets

By Jessica Mead

Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Sterling sank to an eight-month low against the dollar inEuropean trading Wednesday after a downbeat set of minutes in the Bank ofEngland’s Monetary Policy Committee, in an otherwise quiet session ahead of aU.S. Federal Reserve policy statement.

Although Adam Posen remained the only MPC member to vote for further assetpurchases, the tone of the September minutes was exceedingly cautious. Theyshowed that the BOE came close to voting for more quantitative easing, or QE, asgrowth appeared set to become “materially weaker” than the bank had forecast asrecently as August.

Following the minutes, the pound fell 0.7% to be as low as $1.5615 against thedollar and neared a record low against the yen, trading down to become as low asY119.23. But by 1042 GMT, the pound had recouped some of its earlier losses andwas trading at $1.5663 and at Y119.55.

“The text was very dovish and suggests the chances of more QE in November atthe time of the Inflation Report are increasing. In fact, if the economicbackdrop doesn’t stop getting worse, the chances of them thinking about throwingthe kitchen sink at the economy are increasing,” stated Kit Juckes, seniorcurrency strategist at Societe Generale in London.

A weak set of public borrowing figures did little to help the pound. Public-sector net borrowing rose to GBP15.9 billion in August, above the GBP13 billionpredicted by economists.

Most other major currencies remained rangebound, however, as traders wereunwilling to place significant bets ahead of the U.S. Federal Open MarketCommittee’s interest rate announcement due at 1815 GMT.

There was also lingering uncertainty over Greece, with the Greek governmentcabinet contemplating another potential EUR6 billion in budget cuts to secure therelease of the country’s next bailout payment from international lenders.

Details of these extra measures could be disclosed later within the day, but theFOMC decision will likely dominate the U.S. trading session, with the marketexpecting some form of ‘Operation Twist’ whereby the Fed lengthens the averageduration of its Treasury portfolio.

The currency implications aren’t clear-cut. “I don’t think it will havemassive implications for the dollar in the way that actual QE would,” said AdamCole, chief currency strategist at RBC Capital Markets. “But the more active thepolicy, the more dollar negative it might be,” he stated.

The prevailing cautious tone weighed on emerging market currencies. The SouthAfrican rand fell sharply against the dollar while the euro notched up somechunky gains against the Hungarian forint.

At 1055 GMT, the euro was trading at $1.3661 against the dollar, compared with$1.3703 late Tuesday in New York, according to trading system EBS. The dollarwas at Y76.30 against the yen, compared with Y76.46, while the euro was atY104.22 compared with Y104.76. Meanwhile, the pound was trading at $1.5663against the dollar, compared with $1.5744 late Tuesday in New York.

The ICE Dollar Index, which tracks the greenback against a basket ofcurrencies, was at 75.298 compared with 77.110 late Tuesday in New York.

A summary of key levels for chart-watching technical strategists is below:

Forex spot: EUR/USD USD/JPY GBP/USD USD/CHFSpot 1023 GMT 1.3679 76.30 1.5671 0.89333 Day Trend Bearish Bearish Bearish BullishWeekly Trend Bearish Bearish Bearish Bullish200 day ma 1.4056 80.50 1.6103 0.87623rd Resistance 1.3794 76.86 1.5867 0.90192nd Resistance 1.3745 76.58 1.5840 0.90001st Resistance 1.3697 76.40 1.5726 0.8982Pivot* 1.3680 76.53 1.5716 0.88631st Help 1.3642 76.24 1.5615 0.88952nd Help 1.3646 76.11 1.5500 0.88753rd Support 1.3586 76.03 1.5485 0.8858Forex spot: GBP/JPYSpot 1023 GMT 119.593 Day Trend BearishWeekly Trend Bearish200 day ma 129.583rd Resistance 120.682nd Resistance 120.191st Resistance 119.97Pivot* 120.221st Help 118.912nd Support 116.063rd Assistance 115.00

-By Jessica Mead, Dow Jones Newswires; +44 (0) 20 7842 9256, jessica.mead@dowjones.com

(Dow Jones Technical Strategist Francis Bray contributed to this story.)

 (End) Dow Jones Newswires 09-21-110715ET Copyright (c) 2011 Dow Jones & Company, Inc.

— Sterling at new eight-month low against dollar after downbeat BOE minutes

— Minutes raise prospect of additional quantitative easing

— Other major currencies trade in narrow range ahead of U.S. Federal Reservedecision

— Emerging industry currencies suffer as traders steer clear of riskier bets

By Jessica Mead

Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Sterling sank to an eight-month low against the dollar inEuropean trading Wednesday after a downbeat set of minutes in the Bank ofEngland’s Monetary Policy Committee, in an otherwise quiet session ahead of aU.S. Federal Reserve policy statement.

Although Adam Posen remained the only MPC member to vote for further assetpurchases, the tone of the September minutes was exceedingly cautious. Theyshowed that the BOE came close to voting for more quantitative easing, or QE, asgrowth appeared set to become “materially weaker” than the bank had forecast asrecently as August.

Following the minutes, the pound fell 0.7% to be as low as $1.5615 against thedollar and neared a record low against the yen, trading down to become as low asY119.23. But by 1042 GMT, the pound had recouped some of its earlier losses andwas trading at $1.5663 and at Y119.55.

“The text was very dovish and suggests the chances of more QE in November atthe time of the Inflation Report are increasing. In fact, if the economicbackdrop doesn’t stop getting worse, the chances of them thinking about throwingthe kitchen sink at the economy are increasing,” stated Kit Juckes, seniorcurrency strategist at Societe Generale in London.

A weak set of public borrowing figures did little to help the pound. Public-sector net borrowing rose to GBP15.9 billion in August, above the GBP13 billionpredicted by economists.

Most other major currencies remained rangebound, however, as traders wereunwilling to place significant bets ahead of the U.S. Federal Open MarketCommittee’s interest rate announcement due at 1815 GMT.

There was also lingering uncertainty over Greece, with the Greek governmentcabinet contemplating another potential EUR6 billion in budget cuts to secure therelease of the country’s next bailout payment from international lenders.

Details of these extra measures could be disclosed later within the day, but theFOMC decision will likely dominate the U.S. trading session, with the marketexpecting some form of ‘Operation Twist’ whereby the Fed lengthens the averageduration of its Treasury portfolio.

The currency implications aren’t clear-cut. “I don’t think it will havemassive implications for the dollar in the way that actual QE would,” said AdamCole, chief currency strategist at RBC Capital Markets. “But the more active thepolicy, the more dollar negative it might be,” he stated.

The prevailing cautious tone weighed on emerging market currencies. The SouthAfrican rand fell sharply against the dollar while the euro notched up somechunky gains against the Hungarian forint.

At 1055 GMT, the euro was trading at $1.3661 against the dollar, compared with$1.3703 late Tuesday in New York, according to trading system EBS. The dollarwas at Y76.30 against the yen, compared with Y76.46, while the euro was atY104.22 compared with Y104.76. Meanwhile, the pound was trading at $1.5663against the dollar, compared with $1.5744 late Tuesday in New York.

The ICE Dollar Index, which tracks the greenback against a basket ofcurrencies, was at 75.298 compared with 77.110 late Tuesday in New York.

A summary of key levels for chart-watching technical strategists is below:

Forex spot: EUR/USD USD/JPY GBP/USD USD/CHFSpot 1023 GMT 1.3679 76.30 1.5671 0.89333 Day Trend Bearish Bearish Bearish BullishWeekly Trend Bearish Bearish Bearish Bullish200 day ma 1.4056 80.50 1.6103 0.87623rd Resistance 1.3794 76.86 1.5867 0.90192nd Resistance 1.3745 76.58 1.5840 0.90001st Resistance 1.3697 76.40 1.5726 0.8982Pivot* 1.3680 76.53 1.5716 0.88631st Help 1.3642 76.24 1.5615 0.88952nd Help 1.3646 76.11 1.5500 0.88753rd Support 1.3586 76.03 1.5485 0.8858Forex spot: GBP/JPYSpot 1023 GMT 119.593 Day Trend BearishWeekly Trend Bearish200 day ma 129.583rd Resistance 120.682nd Resistance 120.191st Resistance 119.97Pivot* 120.221st Help 118.912nd Support 116.063rd Assistance 115.00

-By Jessica Mead, Dow Jones Newswires; +44 (0) 20 7842 9256, jessica.mead@dowjones.com

(Dow Jones Technical Strategist Francis Bray contributed to this story.)

 (End) Dow Jones Newswires 09-21-110715ET Copyright (c) 2011 Dow Jones & Company, Inc.

August Inflation Report

=--------------------------------------------------------==Key Numbers ! ! Aug. July !Consensus: !Core Inflation y/y +1.9% +1.6% !Core: +1.6% y/y !Core Inflation m/m +0.4% +0.2% !headline: +2.9% !All-items CPI y/y +3.1% +2.7% ! !All-items CPI m/m +0.3% +0.2% !Actual: ! !core: +1.9% ! !headline: +3.1% !=--------------------------------------------------------==

By Nirmala Menon

Of Dow Jones Newswires

OTTAWA (Dow Jones)–Canada’s annual core consumer price index acceleratedunexpectedly in August as the cost of passenger vehicle insurance premiums, foodpurchased from restaurants and bakery and cereal products increased. Theheadline rate rose faster than expected as consumers paid more for gasoline andfood purchased at stores.

Core CPI rose 0.4% on a monthly basis, double the pace of the previous month,lifting the year-on-year rate to 1.9% from 1.6%, Statistics Canada saidWednesday. The monthly headline or all-items CPI sped up to 0.3% from 0.2% andthe annual rate accelerated to 3.1% from 2.7%.

The consensus call was for core CPI to grow 0.2% on a monthly basis and 1.6%year-on-year. The headline rate had been expected to climb 0.1% month-on-monthand increase 2.9% from a year ago.

The pickup in inflation comes even as the Bank of Canada stated this month thatthe need for rate hikes had “diminished” amid the headwinds from a slowing U.S.economy and the euro-zone debt crisis. Governor Mark Carney stated in a speech inSaint John, N.B. Tuesday that the Bank would be “prudent with respect to thepossible withdrawal of any degree of monetary stimulus.” He stated the Bank takesa “flexible” approach and that the policy rate can return to its so-calledneutral rate after inflation reaches the 2% target and financial output reachesits potential.

The Canadian dollar strengthened after the data were published, with the U.S.dollar falling to C$0.9947 from C$0.9957 just before the release.

Although gasoline prices fell 0.8% from July, the cost was 22.8% more than inAugust 2010, StatsCan stated. The cost of fuel oil and electricity also rose.

Food prices increased 4.4% year-on-year as prices of bakery and cerealproducts, meat, dairy products, eggs, fresh fruit and vegetables all increased.Consumers paid 5% more for food purchased from stores and 2.7% more for foodfrom restaurants.

Excluding food and energy, consumer prices accelerated 1.5% from 1.2%previously.

Website: http://www.statcan.gc.ca

-By Nirmala Menon, Dow Jones Newswires; 613-237-0668; nirmala.menon@dowjones.com

 (Finish) Dow Jones Newswires 09-21-110722ET Copyright (c) 2011 Dow Jones & Company, Inc.

August Inflation Report

=--------------------------------------------------------==Key Numbers ! ! Aug. July !Consensus: !Core Inflation y/y +1.9% +1.6% !Core: +1.6% y/y !Core Inflation m/m +0.4% +0.2% !headline: +2.9% !All-items CPI y/y +3.1% +2.7% ! !All-items CPI m/m +0.3% +0.2% !Actual: ! !core: +1.9% ! !headline: +3.1% !=--------------------------------------------------------==

By Nirmala Menon

Of Dow Jones Newswires

OTTAWA (Dow Jones)–Canada’s annual core consumer price index acceleratedunexpectedly in August as the cost of passenger vehicle insurance premiums, foodpurchased from restaurants and bakery and cereal products increased. Theheadline rate rose faster than expected as consumers paid more for gasoline andfood purchased at stores.

Core CPI rose 0.4% on a monthly basis, double the pace of the previous month,lifting the year-on-year rate to 1.9% from 1.6%, Statistics Canada saidWednesday. The monthly headline or all-items CPI sped up to 0.3% from 0.2% andthe annual rate accelerated to 3.1% from 2.7%.

The consensus call was for core CPI to grow 0.2% on a monthly basis and 1.6%year-on-year. The headline rate had been expected to climb 0.1% month-on-monthand increase 2.9% from a year ago.

The pickup in inflation comes even as the Bank of Canada stated this month thatthe need for rate hikes had “diminished” amid the headwinds from a slowing U.S.economy and the euro-zone debt crisis. Governor Mark Carney stated in a speech inSaint John, N.B. Tuesday that the Bank would be “prudent with respect to thepossible withdrawal of any degree of monetary stimulus.” He stated the Bank takesa “flexible” approach and that the policy rate can return to its so-calledneutral rate after inflation reaches the 2% target and financial output reachesits potential.

The Canadian dollar strengthened after the data were published, with the U.S.dollar falling to C$0.9947 from C$0.9957 just before the release.

Although gasoline prices fell 0.8% from July, the cost was 22.8% more than inAugust 2010, StatsCan stated. The cost of fuel oil and electricity also rose.

Food prices increased 4.4% year-on-year as prices of bakery and cerealproducts, meat, dairy products, eggs, fresh fruit and vegetables all increased.Consumers paid 5% more for food purchased from stores and 2.7% more for foodfrom restaurants.

Excluding food and energy, consumer prices accelerated 1.5% from 1.2%previously.

Website: http://www.statcan.gc.ca

-By Nirmala Menon, Dow Jones Newswires; 613-237-0668; nirmala.menon@dowjones.com

 (Finish) Dow Jones Newswires 09-21-110722ET Copyright (c) 2011 Dow Jones & Company, Inc.

— U.K. August public borrowing highest since records began in 1993

— Receipts under-perform OBR forecasts

— ONS revises down borrowing figures for previous months

— U.K. treasury says deficit-cutting program on track

(Rewrites introduction, adds detail and Treasury comment from paragraph four.)

By Alex Brittain and Ilona Billington

Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Falling tax receipts and higher spending pushed U.K.public borrowing to its highest August figure on record, but the U.K. governmentsaid it could press ahead with efforts to cut the public deficit.

The Office for National Statistics Wednesday said that public-sector netborrowing, excluding financial-sector interventions, rose to GBP15.9 billionfrom GBP14.0 billion in August of last year.

That figure is the highest for this month since records began in 1993 and badnews for Chancellor of the Exchequer George Osborne, who is looking for to pare backthe U.K.’s annual deficit with an GBP111 billion program of spending cuts andtax rises.

But in better news for Osborne, the ONS revised down the net borrowing figurefor the 2010/11 fiscal year, by GBP5.9 billion to GBP136.7 billion. It alsoimproved July’s net borrowing figure to show a surplus of GBP2.4 billion,compared with a deficit of GBP200 million previously estimated.

That makes the chancellor’s deficit-cutting targets somewhat easier to reach.But if the economy continues to slow his plans could run into trouble, as taxreceipts fall and the govt is forced to spend more on jobless benefits.

The International Monetary Fund Tuesday cut its forecast for U.K. growth to1.1% this year–way below the OBR’s assumption of 1.7%–and stated the governmenthas room to ease its austerity program if a weak economy makes it necessary.

But Osborne has repeatedly dismissed calls for him to switch to a more modest”plan B” of austerity measures, arguing that investors will push up the U.K.’scost of borrowing on monetary markets if he is seen to be soft within the deficit.

Reacting to the ONS figures, a treasury spokesman said the deficit-cuttingplan is on course.

“Tax receipts have continued to grow and spending so far this yr has grownat the rate the OBR forecast in the budget,” he stated, referring to the Officefor Budget Responsibility, the independent fiscal monitor.

But while a 3.7% rise in government spending so far this fiscal 12 months is inline with the OBR’s predictions, income has under-performed. Total receipts–chiefly taxes–rose 4.6% in between April and August, missing the OBR’s forecast of7.2%.

-By Alex Brittain and Ilona Billington, Dow Jones Newswires; +44 20 7842 9203;alex.brittain@dowjones.com

 (End) Dow Jones Newswires 09-21-110736ET Copyright (c) 2011 Dow Jones & Company, Inc.