More quantitative easing sparks selling in sterling; ECB on hold By Polya Lesova, MarketWatch LONDON (MarketWatch) — The British pound sank Thursday after the Bank of England announced a fresh round of quantitative easing, while the euro also declined as the European Central Bank kept interest rates on hold. The pound GBPUSD -1.04% dropped to $1.5309, down from to $1.5466 in North American trading late Wednesday. The move came after the Bank of England said it will increase its asset purchases by 75 billion pounds (around $115 billion) to £275 billion. Many economists had expected the bank to announce more quantitative easing at its November meeting rather than Thursday. The central bank also kept interest rates on hold at 0.5%. The dollar index DXY +0.49% , which tracks the performance of the greenback against a basket of other major currencies, rose to 79.312 from 78.968. The euro EURUSD -0.65% fell to $1.3262 from $1.3347 late Wednesday, under pressure after the European Central Bank kept rates unchanged at 1.5%. Some economists had expected that the bank may lower interest rates in response to the slowdown in the euro-zone economy. A news conference held by Jean-Claude Trichet, president of the European Central Bank, is scheduled to begin at 8:30 a.m. Eastern time and will be his last as head of the central bank. Italy’s Mario Draghi will take the helm in November. See more on the ECB meeting and Trichet’s legacy. In other trading, the dollar USDJPY +0.03% bought 76.67 Japanese yen compared with 76.78 yen on Wednesday. Polya Lesova is chief of MarketWatch’s London bureau.

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