15th August 2012
Investors believe the Bank of England (BoE) will soon up its quantitative easing programme and as a result the GBP lost some ground against the USD yesterday (August 9th).
Following the BoE's latest announcements, the pound was initially buoyed as it became clear British interest rates would remain stationary, but most onlookers believe the Bank will need to do something to kick-start the struggling economy.
Quantitative easing is seen as negative for sterling exchange rates as it involves flooding the market with the currency and as a result the pound fell by 0.3 per cent against the dollar, closing at $1.5610, having reached a one-week high the day before.
Although the GBP did gain on the euro, further worries are likely to come to fruition in the future.
Sterling is expected to lose more ground on the dollar and other currencies which are seen as safe havens in the economic world such as the Japanese yen and Australian dollar.
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