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Cable Stabilizes After BOE Announcement

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As expected the Bank of England left its benchmark rate unchanged at 0.5% while keeping its asset purchasing program at 200 Billion GBP. As is typical the BOE made no statement post announcement but cable firmed in reaction to the news rising about 20 points to 1.5760.

Recent UK data has been generally stronger than expected with manufacturing sector especially buoyant. Today's Trade Balance data, although wider than anticipated was not nearly as bad the headline print would indicate with exports rising to their highest level since records began in 1992.

Overall, the recent pick up in UK economic activity has changed the focus of BOE monetary policy away from additional asset purchasing measures towards a more neutral posture. That in turn should prove supportive to the pound as long as UK economic data continues to show improvement. Having weathered some profit taking in mid morning European session, sterling could rebound during North American trade targeting the 1.5800 level once more.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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