Pound Rises vs. Dollar as BoE Does Not Add Stimulus
The Great Britain pound rose against the US dollar and trimmed its losses versus the euro and the Japanese yen today after Bank of England refrained from expanding its stimulating program.
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £375 billion, financed by the issuance of central bank reserves.
Many analysts believe that the central bank would look at the effect of the current program before deciding to take further steps for bolstering the economy. Indeed, the bank said:
The Committee expects the announced programme of asset purchases to take another three months to complete.
Market commentators viewed that statement as a signal that any expansion of quantitative easing would occur no earlier than November.
GBP/USD jumped from 1.5536 to 1.5568 as of 11:50 GMT today. EUR/GBP rose from 0.7867 to 0.7883, while earlier it touched the high of 0.7905. GBP/JPY was little changed at 121.71, following the earlier drop to 121.50.
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Earlier News About the Great Britain Pound:
- UK Pound Weaker on Economic Data (2012-08-01)
- Pound Falls as Consumer Confidence Index Remains in Negative Territory (2012-07-31)
- UK Pound Struggles Against Dollar on Recession Concerns (2012-07-30)
- Pound Climbs as Draghi Spurs Risk Appetite (2012-07-26)
- Pound Drops as GDP Shrinks (2012-07-25)