The pound dollar exchange rate (Currency:GBPUSD) is 0.17 pct higher on Tuesday night's closing level at 1.6280. Driving sterling strength today are reports of central bank buying and commercial considerations involving corporate treasuries hedging currency exposure. This activity is however hard to pin down, so we look at other broader issues that are proving positive for sterling. One of these is the release of the Bank of England minutes for this month's monetary policy decision. "The discussion of less impact from coupon transfers than previously thought and currency being too strong still provides an easing bias, but outside of Miles' vote for 25bn QE, still doesn't suggest much feeling of a pressing need," says Shaun Osborne at TD Securities. This notion that there is no immediate threat of further money printing will be noted as the key theme driving GBP today. Eric Theoret at Scotiabank does point out the Bank is a little concerned about the strength of sterling: "The minutes release is positive for GBP, given that the 8-1 majority for maintaining asset purchases has remained unchanged, leaving the BoE as less accommodative than the Fed in the current environment. The minutes highlight a frustration with ‘unwelcome’ currency strength, a hopeful outlook for the Funding for Lending Scheme, and a recognition that Q4 growth may turn out to be negative as a result of the unwinding of a strong Q3." There are also technical considerations that are seen driving the pound dollar exchange rate: Scotiabank maintain a bullish stance on GBP/USD and they see momentum accelerating. "GBP/USD may test higher to 1.6309, and support may settle at 1.6064," says a currency note from Citigroup. As the US Federal Reserve expanded QE, Citi analysts anticipate the dollar to continue to depreciate in 2013.

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