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Forex - GBP/USD up after Bank of England holds rate steady

Published 01/12/2012, 07:22 AM
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Investing.com - The pound added to against the U.S. dollar on Thursday, after the Bank of England held the benchmark interest rate steady at 0.5% and announced no change to its monetary stimulus program.

GBP/USD hit 1.5364 during European early afternoon trade, the session high; the pair subsequently consolidated at 1.5361, gaining 0.20%.

Cable was likely to find support at 1.5278, the session low and a three-month low and resistance at 1.5490, Wednesday’s high.

The BoE’s nine-member Monetary Policy Committee said it was maintaining the benchmark interest rate at a record-low 0.50%, where it’s stood since March 2009, in a widely expected move.

The bank also kept the stock of asset purchases financed by the issuance of central bank reserves at GBP275 billion.

The announcement came after official data showed that manufacturing production in the U.K. fell unexpectedly in November, while industrial production also declined unexpectedly.

Market sentiment was boosted earlier after auctions of Spanish and Italian government met with strong investor demand and lower yields but investors remained jittery ahead of the European Central Bank’s policy-setting meeting later in the day.

The pound was lower against the euro, with EUR/GBP rising 0.31% to hit 0.8314.

Also Thursday, the U.S. was to release official data on retail sales and initial jobless claims.


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