U.K. Pound Moves Lower in Currency Trading After BoE Rate Decision

Asset buying program expands, sending sterling lower in forex trading

The U.K. pound is moving lower in currency trading on the FX market this morning after the Bank of England decided to leave the rate at 0.5%. Apparently, the BoE is not quite ready to fully embrace the zero interest rate policy. However, a different quantitative easing method is being expanded in Britain right now, and that is likely accounting for the sterling’s sharp move lower in forex trading.

The Bank of England is expanding its asset buying program by another £50 billion. This is in an effort to help prop up financial institutions with bad assets. The move is designed to help stimulate the economy without making the move below 0.5% for interest rates.

The Bank of England has expressed its opinion that inflation is mostly under control, and some easing is appropriate. The sterling has lost ground to both the U.S. dollar and the euro in forex trading on the news.