The pound climbed just over a cent (0.6%) against the dollar, buoyed by the BoE’s decision to keep its assets purchase scheme on hold.
- In early trading sterling moved up against a broadly weak dollar, supported by expectations that the BoE would keep interest rates unchanged and maintain its current level of quantitative easing.
- The dollar also came under pressure, falling broadly as rising equity markets fuelled demand for riskier assets at the expense of the safe haven US currency.
- Dollar selling was led by positive employment data in Australia, which spurred investors to relinquish positions in the greenback in favour of higher-yield currencies, favouring an upward movement in the sterling/dollar pair.
- At midday, the BoE announced no change to their current monetary policy, which allowed the pound to advance further, reaching a ten day high of 1.6117.
- However, sterling did cap its gains as Mervyn King left the door open for further quantitative easing in the future.
Related posts:
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- Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today
- Pound advanced against a broadly weaker euro yesterday, but has stumbled in trading this morning
- Kiwi halted its climb yesterday, as demand for higher-yeilding currencies weakened
- The sterling/euro price closed relatively unchanged yesterday as both the MPC and ECB held rates.
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