AUS: Pound sterling update: Big surprise as ECB fails to cut interest rate
The British pound sterling (Currency:GBP) is broadly unchanged against the majors this lunchtime, "after the Bank of England kept interest rates unchanged at a record low of 0.5%, while policy makers also elected not to increase quantitative easing measures in light of the recent positive reports on UK manufacturing and service sector growth," says Adam Solomon at TorFX.
The pound Australian dollar currency rate is 0.35 pct in the blue at 1.5540 at 14:10 in London.
The pound euro exchange rate is unchanged at 1.2623.
The pound dollar exchange rate is 0.02 pct higher at 1.5909.
"The big surprise came from Europe, as the European Central Bank elected not to cut rates to 0.5%, preferring to hold steady at 0.75%, despite widespread speculation to the contrary. The Euro edged higher against the Pound and the U.S Dollar following the announcement but it does place greater emphasis on the ECB press conference this afternoon," says Solomon.
However, the ECB will embark on an 'unlimited' bond buying programme to prop up struggling Eurozone countries.
That markets have not moved by any significant amount during and after the press briefing is indicative of investors having correctly called today's outcomes.
Elsewhere, the U.S economy received a boost when the latest private sector employment report showed a much larger increase in jobs added to the economy for August.
The ADP employment report showed an increase of 201,000 versus expectations of 140,000. The report may provide an insight into the Non-farm payrolls report tomorrow – the Dollar has been unmoved by today’s data.
