BLBG:Pound Advances Versus Dollar After BOE Holds Asset-Purchases
The pound rose against the dollar after the Bank of England left its asset-purchase target at 375 billion pounds ($564 billion) and kept the benchmark interest rate at a record-low 0.5 percent.
U.K. government bonds fell as the London-based central bank’s Monetary Policy Committee said it would keep the so- called quantitative-easing target unchanged. The decision was forecast by 29 of 39 economists surveyed by Bloomberg News. The remainder predicted increases to between 400 billion pounds and 450 billion pounds.
“Clearly not all members of the MPC are on the same page yet and some hawkishness remains,” said Neil Jones, head of European hedge fund sales at Mizuho Corporate Bank Ltd. in London, before the decision. “The pound will advance initially.”
Sterling rose 0.2 percent to $1.5066 at 12:07 p.m. London time after falling to $1.4967, the weakest level since July 2010. The U.K. currency slid for a third day versus the euro, dropping 0.2 percent to 86.47 pence.
Britain’s currency rose 0.3 percent versus the dollar to $1.5716 and gained 1.3 percent to 85.26 pence per euro when the MPC announced no change to policy at its previous meeting on Feb. 7.
Ten-year gilt yields rose four basis points, or 0.04 percentage point, to 2 percent.
Sterling has dropped 5.7 percent this year, the second- worst performer after the yen among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro rose 1.3 percent and the dollar gained 2.8 percent.
To contact the reporter on this story: Neal Armstrong in London at narmstrong8@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
