The British Monetary Policy Committee decided to expand the Asset Purchase Facility by an additional 50 billion pounds to £325, as widely expected.
GBP/USD is jumping after the release, as an expansion of 75 billion pounds was also on the cards.
This comes on the background of rising unemployment. Recent figures, including an improvement in manufacturing, didn’t deter the bank from printing more pounds, but perhaps kept the expansion at the lower end of expectations.
Adam Posen, the biggest dove on the committee, hinted that this is the direction.
The previous expansion seen in October ran its course and ended in January. The current move is expected to run for three months.
GBP/USD was hesitant after the manufacturing and trade balance data, but now makes a stronger move: cable is already at 1.5865, and aiming for the 1.59 line it traded in yesterday. For more on the pound, see the GBP/USD forecast.
A rate decision is due soon in the euro-zone. Mario Draghi is expected to make no changes to the current policy, but his press conference will certainly provide lots of action for the euro, and also for other currencies.
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