Pound’s Gains Followed BoE Minutes
Some positive news for the pound came from Great Britain, allowing the currency rise against the Japanese yen. The sterling was also higher versus the US dollar yesterday, but pulled back today. The currency extended its downfall against the euro.
The Bank of England released the minutes of its last monetary policy minutes yesterday. The minutes showed that the central bank’s policy makers were divided in their opinion about the effect of the monetary easing:
Some members felt that there was still considerable scope for asset purchases to provide further stimulus. Other members, while acknowledging that asset purchases had the scope to lower long-term yields further, questioned the magnitude of the impact that lower long-term yields on corporate debt and equity would have on the broader economy at the present juncture.
There was also disagreement about necessity of additional stimulus:
There were some differences of view between members about the outlook and the likelihood that further easing in policy would be required.
Absence of further quantitative easing would be positive for the pound, therefore the minutes were positive for the currency. Another bullish news for the sterling was the fall of jobless claims by 4,000, compared to expectation of a meager drop by 200.
GBP/USD fell to 1.6125 as of 3:26 GMT today, following yesterday’s rally from 1.6108 to 1.6145. EUR/GBP was little changed today at 0.8120. GBP/JPY advanced from 127.43 to 127.68.
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Earlier News About the Great Britain Pound:
- UK Pound Attempts Recovery against US Dollar (2012-10-12)
- GBP Higher vs. USD, Loses Gains vs. EUR & JPY (2012-10-10)
- UK Pound Holds Its Own Against US Dollar (2012-10-05)
- Pound Gains as BoE Keeps Policy Unchanged (2012-10-04)
- UK Fundamentals Unexpectedly Bad, Pound Loses Strength (2012-10-02)