UK Pound Gains After BOE Policy Explanation

UK pound is heading higher today, gaining ground against major counterparts after yesterday’s drop. The latest news from the Bank of England is helping the pound against other currencies.

Earlier today, the Bank of England offered some specific guidance about its monetary policy going forward. New BOE Governor Mark Carney said that the current record-low lending rate would remain in place until unemployment in the United Kingdom drops below 7 per cent. With unemployment currently sitting at 7.8 per cent, and with economic recovery sluggish, many expect that means the BOE will keep rates low until at least 2016.
Additionally, Carney reiterated the position that the BOE stands ready to add more quantitative easing if necessary.
This news normally would have resulted in a lower pound, but the currency is gaining ground. There is a bit of better than expected macroeconomic data to help the cause, and a little bit of risk appetite. With expectations of accommodative monetary policy for a little longer, though, many expect the current gains by the UK pound to be short lived.
At 14:19 GMT GBP/USD is up to 1.5516 from the open at 1.5348. EUR/GBP is lower, heading down to 0.8586 from the open at 0.8669. GBP/JPY is lower, though, dropping to 149.9410 from the open at 150.0350.

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