Pound Up as Asset Purchase Program Changes
The pound climbed significantly versus the dollar, and to a lesser extent versus the euro as the national central bank extended its asset-purchase program less than expected, suggesting that the British economy is needing less government stimulus to find its way out of recession, increasing attractiveness for the U.K. currency.
The Bank of England has been using its asset-purchase program to stimulate the faltering economy in the U.K., and its further extension was lower by 12.5 percent in total number of funds than what most analysts suggested, at 200 billion pounds, indicating that in the mid-term future, the program may be abandoned, as the British economy is likely to recovery its growing pace which will lead to further interest rate hikes, adding confidence towards the pound that has been having a positive performance this week in trading markets. The quantitative easing measures used by the Bank of England so far were one of the biggest factors to push the pound down this year, as it influenced negatively the pound outlook and sentiment towards the U.K.’s economy.
Analysts were surprised by the BOE tone and measures regarding the asset-purchase program, shifting instantly the trends for the pound in foreign-exchange markets. The quickest the asset-purchase program wil be partially or totally suspended, the better will be for the pound in currency markets.
GBP/USD traded at 1.6579 as of 14:04 from 1.6508 yesterday. GBP/JPY traded rather neutral from yesterday at 150.09.
If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.
Earlier News About the Great Britain Pound:
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November 7th, 2009 at 2:27 pm
Hi there, I have a large amount of cash overseae and I need them here. Is that a good time to transfer them into Sterling or should I wait the Sterling might drop more?
Thanks
[Reply]
Andrei Moraru Reply:
November 7th, 2009 at 2:32 pm
You have a large amount of cash overseas in what currency?
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November 7th, 2009 at 7:39 pm
Syrian Pound.
[Reply]
Andrei Moraru Reply:
November 7th, 2009 at 7:45 pm
As far as I know, SYP is pretty stable vs. U.S. dollar at 46 per dollar. So the GBP/SYP rate is determined only by GBP/USD dynamics and there is a high probability that Pound will go down against the Dollar soon. That would be a good opportunity to convert from Syrian pounds to British ones.
But you can always convert Syrian pounds into 10-pound coins and spend them in Norwegian vending machines for some huge illegal profits
.
[Reply]
November 7th, 2009 at 8:13 pm
It is a good idea, I will ask you to join me when I go mad and do it
Thanks for your reply.
[Reply]
November 8th, 2009 at 6:26 pm
apparently the syrian pound is the only pound with some credibility internationally nowadays, or at least in Norway.
[Reply]
Andrei Moraru Reply:
December 4th, 2009 at 12:53 pm
[Reply]