Pound drops against dollar after BoE minutes released

Posted On: February 22, 2012
The value of the English pound fell to its lowest rate since the middle of December amid Bank of England meeting minutes noting a policy maker duo endorsed asset purchases in amounts larger than what the body finally agreed to, according to Bloomberg.

The currency dropped against 15 of its 16 top rival monetary units as two officials sought a quantitative easing program for the equivalent of $117 billion rather than the $78.4 billion that was supported by seven other policy makers and ultimately agreed to.

"The minutes are a dovish surprise," foreign exchange strategist Lee Hardman with Bank of Tokyo-Mitsubishi UFJ in London told Bloomberg. "The market was moving to reduce the scope for further quantitative easing, which was supporting the pound, and that's now being seen as incorrect because two members voted for bigger bond purchases. We see further downside for the pound."

A report will note the economy of the U.K. shrank during the final quarter of last year, which drove demand for safer assets.

Reuters reports other policy makers with the central bank considered the possibility of not enacting a monetary easing policy, indicating possible fissures with the body.

Category: Industry News


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