Investing.com - The pound remained higher against the dollar on Thursday after the Bank of England left interest rates on hold at their current record lows.
GBP/USD was at 1.5402, 0.41% higher for the day, from around 1.5420 ahead of the announcement.
The BoE said it was holding the benchmark interest rate at 0.50%, in a widely expected move. The rate has been held at that level since March 2009.
The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.
The bank published no rate statement and the minutes of the meeting are due to be published in two weeks’ time.
The announcement came a day after survey data showed that the U.K. service sector expanded at the slowest rate in five months in May, indicating that growth could struggle to pick up in the current quarter after a weak first quarter.
Sterling was at one-month lows against the broadly stronger euro, with EUR/GBP at 0.7365, the most since May 8.
The dollar remained broadly weaker as a spike in German bund yields continued to underpin demand for the euro.
German 10-year bund yields jumped to their highest level since September on Thursday, narrowing the gap with their U.S. counterparts.
German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.
The spike in German bund yields came a day after European Central Bank President Mario Draghi said that investors should get used to higher debt market volatility.
The euro received an additional boost after the ECB revised up its inflation forecast for this year and said it saw no reason add more monetary stimulus following the recent rally in European bond yields.
The euro shrugged off jitters over the prospects of a Greek default as a deadlock between Greece and its international creditors continued.
Talks between Greek Prime Minister Alexis Tsipras and European Commission President Jean-Claude Juncker in Brussels late Wednesday ended without an agreement to unlock more financial aid before the country runs out of money.
However the two sides were said to be close to a deal and were expected to hold further talks on Friday.
Greece is due to make a €305 million payment to the International Monetary Fund on Friday and its bailout program is set to expire later this month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.41% to two-week lows of 94.95, pressured by the stronger euro.