Pound Declines on Bank of England Statement

The pound declined in the end of this week, after the Bank of England affirmed that it will expand the current asset purchasing program in order to assure Britain’s financial system sustainability.
After reaching a nine-month high versus the greenback and gaining consistently versus the euro, the pound lost sharply towards the end of the week as the Bank of England stated that it will proceed its asset purchase program, mentioning that quantitative easing is still necessary to assure stability in the British economy. During this week, the pound traded above 1.70 versus the greenback, being the first time it crossed this mark in 2009, as signs of economic recovery raised investor’s confidence to purchase attractive pound-priced assets, but several factors still weighed on the pound’s outlook, halting a 3-week rally towards the end of the week.
Even if this week global economic reports and figures helped traders to invest further in riskier assets, the specific situation in the British financial system still remains rather complicated, as the Bank of England indicated this Friday, considering the current situation as fragile, which caused a mass evasion of capital from Great Britain’s equities markets this Friday, affecting the pound directly.
GBP/USD ended the week at 1.6685 after crossing the 1.70 mark one day earlier.

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