The Great Britain pound sank against most of its major currencies during the past trading week as the UK central bank signaled that monetary tightening is not in sight. Still, the sterling managed to gain on the US dollar over the week, though it trimmed its gains by the weekend.
The pound has started the week on a positive note as economic data looked good. Yet everything changed after the Bank of England made its monetary policy decision. While the decision to keep interest rates unchanged was expected, some signs, including the fact that the single hawk dissenter this time joined others in voting for stable rates, suggested that the central bank would not be able to tighten policy in the foreseeable future. Such outlook demolished the currency.
The pound was not the only currency hurt by a policy outlook, though, as the US dollar also suffered from the same concerns about inability of its respective central bank to hike rates this year. This allowed Britain’s currency to gain on the US one even though in a surprising twist the greenback strengthened after US mixed employment data.
GBP/USD ended the week at 1.4495 after opening at 1.4249 and rising to the weekly high of 1.4667. GBP/JPY dropped from 172.89 to 169.52 while EUR/GBP rallied from 0.7603 to 0.7689.
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