The recovery of the British currency is due in part to the actions of the Bank of England (BoE), which on Thursday bought 1,415 million pounds (1,550 million dollars) of British government bonds with maturities greater than 20 years, in the second day of a multi-billion pound program aimed at stabilizing the market.
“Sterling is outperforming and this is a continuation of what we saw yesterday (Wednesday),” said Brian Daingerfield, head of G10 forex strategy at NatWest Markets. “The Bank of England took a pretty decisive step to stabilize the markets. And that is being taken positively by the foreign exchange market,” he added.
Sterling had initially fallen on Thursday as Prime Minister Liz Truss defended her government’s budget for tax cuts. The dollar, meanwhile, fell 0.1% against a basket of currencies to 112.454. The euro rose 0.4% against the dollar to settle at $0.9767.
Attention was focused on German inflation, which jumped to 10.9% this month, well above expectations of 10%, suggesting that the euro zone data, to be published on Friday, will also exceed the 9.6% expected, reinforcing the aggressive bias of the European Central Bank. Against other currencies, the dollar was up 0.3% at 144.525 yen.
Source: Ambito
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