GBP/USD Falls to 18 Month Low After BOE Minutes

The pound slumped to a 15-month low against the euro after Bank of England minutes showed more officials voted to expand asset purchases at this month’s meeting, a policy that that typically debases a currency.

Sterling dropped to the lowest level since June versus the dollar after minutes of the central bank’s Feb. 7 meeting showed policy makers also considered an interest-rate cut. Governor Mervyn King and Paul Fisher joined David Miles in voting to increase the target for bond purchases by 25 billion pounds ($38.3 billion) to 400 billion pounds, though they were outvoted by the remaining six members of the Monetary Policy Committee. U.K. government bonds declined.

“The market clearly has sterling in the cross hairs,” said Gavin Friend, a foreign-exchange strategist at National Australia Bank Ltd. in London. “King and Fisher have joined Miles in voting for more quantitative easing and the market has thumped sterling on the back of that.”


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