The Bank of England maintained its main interest rate and the size of the asset purchase program today. That allowed the Great Britain pound to gain against the euro and to erase gains versus the US dollar. The currency remained weak against the Japanese yen.
The BoE announced today:
The Bank of Englandâs Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.
The market reacted much better to this announcement than to the decision of the European Central Bank, even though they were basically the same. That is strange as the economic conditions in Britain are not much better than in the rest of Europe. Anyway, the sterling currently shows signs of weakness and may lose its gains.
EUR/GBP fell from 0.7986 to 0.7973 as of 17:20 GMT today and its daily low of 0.7955 was the lowest since October 1. GBP/USD traded at 1.5974 after falling from 1.5982 to 1.5927. Meanwhile, GBP/JPY retreated from 127.84 to 127.26.
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