GBP/USD down to 1.6500 After Fed Slows Stimulus

The pound fell for a third day versus the dollar as Federal Reserve policy makers yesterday trimmed stimulus after Bank of England Governor Mark Carney repeated his pledge to keep U.K. interest rates low.

Sterling strengthened against the euro as a Bank of England report showed mortgage approvals climbed to the highest level in six years last month. The Federal Open Market Committee said yesterday that it will cut monthly bond purchases by $10 billion to $65 billion, boosting the dollar. U.K. government bonds were little changed after 10-year yields fell to the lowest level since November.

“The pound is weaker against the dollar but that’s more a story of broad dollar strength after the FOMC meeting,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “We still have a positive outlook for the pound and see further strengthening ahead driven by the ongoing robust performance of the economy.”


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