The pound was 0.2 percent from an eight-month high versus the dollar after the Federal Reserve maintained the pace of asset purchases that debase the U.S. currency, contrasting with U.K. officials who saw no need for additional stimulus this month.
Sterling jumped the most since July 2010 yesterday as Fed policy makers unexpectedly refrained from paring back their quantitative-easing program. A report today will show U.K. retail sales rose for a fourth month in August. The Debt Management Office is scheduled to auction 4.75 billion pounds ($7.66 billion) of five-year gilts today.
“The general consensus is that clearly this is a more dovish Fed than they thought and clearly it throws some doubt around the timing of the removal of their QE policies,” said Greg Gibbs, a senior currency strategist at Royal Bank of Scotland Group Plc in Singapore. “The Bank of England had a more hawkish bent in its minutes yesterday so we’ve seen significant improvement in the pound. It probably will continue to strengthen modestly in the short term.”
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