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Forex Flash: BOE announces modifications to funding – Investec

FXstreet.com (Barcelona) - As expected, the Bank of England and Treasury have today announced a number of modifications to the Funding for Lending Scheme in an effort to boost lending to small and medium sized companies.

The scheme will be extended for another year to January 2015. Further, from 2014 every £1 of net lending to SMEs will allow banks to draw down £5 from the FLS. Over the remainder of 2013, £1 of net SME lending will boost banks’ FLS allowances in 2014 by £10.

According to the Investec Research Team, “Banks will also have to report their lending to their non-bank subsidiaries, which offer credit in order to encourage them to lend to the private sector.” Meryvn King and co’s hope is that the adjustments and extension to the scheme will provide a structure that will help raise funding directed to the neglected SME sector, in the face of criticism that the scheme has so far only been of benefit to banks and homebuyers.

Forex: EUR/USD held by 1.2980 on US session

The EUR/USD downside is stalling at the 1.2980 line as the New York session opens with the US durable goods orders report already out. The EUR/USD peaked at 1.3034 high by mid-European morning as the pair reacted higher following a tumble to 1.2956 low on the very disappointing German IFO survey that confirmed weakening activity in the country after yesterday’s PMIs. As of writing, the pair is trading just below the 1.3000 level.
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Session Recap: US dollar mixed, consolidates within recent ranges

The US dollar trades mixed across the board although mainly within its recent ranges. The euro came under pressure and fell back below the 1.3000 level as weaker-than-expected German Ifo data fueled concerns about the state of the eurozone's core member after a poor PMI reading yesterday.
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