Pound Down on Policy Makers Disagreement

The British currency went down today versus the euro and the dollar as a statement regarding a policy makers meeting yesterday indicated divergent opinions concerning the asset-purchase program, declining attractiveness for the pound as the central bank has not found a point of consensus towards the future of the U.K.’s monetary policy.

After several days gaining versus major currencies, the pound’s rally was halted today after Bank of England‘s meeting minutes discussions were published, showing that despite the fact the majority of policy makers voted for a 25 billion pound boost for the current BOE’s asset-purchase program, one policy maker suggested a further expansion and another opted for no changes in the current program’s budget, evidencing a split inside Britain’s monetary decision makers, which decreased confidence towards the future of the country’s economy, setting the pound down versus the euro and several other major currencies in foreign-exchange markets this Wednesday.

As the economy in the British Isles start to improve, it is likely that the current quantitative measures being used by the Bank of England to stimulate the economy will be phased out gradually, but the lack of consensus regarding policy makers is unwelcome for the pound’s outlook, as traders could then opt for countries with a more solid monetary policy, purchasing assets in Australia for example.

GBP/USD traded at 1.6808 as of 14:25 GMT from a previous rate of 1.6853 in the intraday. EUR/GBP traded at 0.8902 from 0.8845.

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