Investing.com - The pound extended gains against the broadly weaker dollar on Thursday after the Bank of England left interest rates on hold and warned that rising uncertainty over Brexit could hit the economy.
GBP/USD was up 0.82% at 1.4374 from around 1.4363 earlier.
The BoE’s monetary policy committee voted unanimously to leave borrowing costs at their current record low of 0.5%, extending a run dating back to March 2009.
Policymakers also voted 9-0 to leave the Bank’s quantitative easing program unchanged at £375 billion.
In its meeting minutes, the BoE noted that rising uncertainty over a possible British exit from the European Union in the upcoming referendum on June 23 could hit economic demand.
“There appears to be increased uncertainty surrounding the forthcoming referendum on UK membership of the European Union. That uncertainty is likely to have been a significant driver of the decline in sterling,” the minutes said.
Sterling moved higher against the euro, with EUR/GBP down 0.2% at 0.7855 from 0.7886 earlier.
The dollar remained broadly weaker a day after the Federal Reserve lowered its outlook for interest rate increases by the end of this year to two from four.
The Fed said the U.S. economy faces risks from an uncertain global economy, even though moderate growth and "strong job gains" would still allow it to hike rates again this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.56% at 95.16, not far from the five-month lows of 95.05 hit earlier in the day.