UK pound is heading higher today, gaining ground as the economic picture improves, markets head higher, and the Bank of England is expected to move forward with a policy to step down its asset purchase program.
Even though Bank of England Governor Mark Carney expressed that a low-rate policy will remain in place for the foreseeable future, many analysts and others expect the BOE to step down its asset purchase program, reducing its quantitative easing efforts.
This expectation comes as news indicates that the British economy is improving, and as markets around the world perk up a bit. The FTSE 100 is one of the indexes gaining some ground today, and many investors are happy that US stock futures are pointing to a higher open.
All of this is providing some support for the UK pound. Even though there is some speculation that Carney might try to “talk the pound lower” by changing the unemployment threshold from 7 per cent, the pound is still gaining ground today. Sterling is seen as a currency connected to stocks, and as equities improve, the UK pound often does as well.
At 13:02 GMT GBP/USD is up to 1.6522 from the open at 1.6451. EUR/GBP is down to 0.8218 from the open at 0.8291. GBP/JPY is up to 169.0500 from the open at 168.8250.
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