Friday, October 16, 2009

Pound Climbs On Asset-Purchase Program Speculations


The pound gained today after hitting several record lows this week specially versus the euro, as speculations indicate that the current central bank asset-purchase program may be suspended, finally providing support for the British currency to gain in foreign-exchange markets.

After speculations suggested that the Bank of England is likely to interrupt its asset purchase program due to undisclosed reasons in an interview given by BOE Markets Director Paul Fisher to the Financial Times, the pound witnessed its sharpest gains in October, specially versus the greenback and the yen, but also the euro and a basket of emergent-market currencies. Mixed sentiment towards the U.S. economy made the dollar to erase early gains versus several currencies, including the British pound, which crossed the $1.60 line this Thursday, after several sessions losing in currency markets.

Most of analysts and traders were expecting the BOE’s asset-purchase program to be extended as the economy in the British Isles remains in a rather delicate situation, specially in the financial sector, receiving Fisher’s comments as a surprise that provide support for the pound to climb to more optimistic levels, as the quantitative easing measures taken by the Bank of England were one of the biggest responsible for the pound’s devaluation.

GBP/USD traded at 1.6262 as of 18:34 GMT from a previous rate of 1.5963 yesterday. EUR/GBP traded at 0.9173 from 0.9325.

This article taken by topforexnews.com.

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