Economics
Sterling Tanks After BoE Talks About Negative Interest Rates
The Great Britain pound sank today, overtaking the New Zealand dollar as the weakest currency on the Forex market during Thursday’s trading. The sterling dropped after the monetary policy announcement from the Bank of England. While the central bank kept its policy unchanged, the wording of the statement led to the drop of the currency. As was widely expected, the BoE left its monetary policy unchanged, with the benchmark interest rate remaining at 0.10% and the size of the Asset Purchase […]

The Great Britain pound sank today, overtaking the New Zealand dollar as the weakest currency on the Forex market during Thursday’s trading. The sterling dropped after the monetary policy announcement from the Bank of England. While the central bank kept its policy unchanged, the wording of the statement led to the drop of the currency.
As was widely expected, the BoE left its monetary policy unchanged, with the benchmark interest rate remaining at 0.10% and the size of the Asset Purchase Facility at £745 billion. Policymakers voted unanimously for both decisions. But what caught the attention of market participants and analysts was the part in the Monetary Policy Summary and minutes of the Monetary Policy Committee meeting, which revealed that policymakers are considering negative interest rates:
The Committee had discussed its policy toolkit, and the effectiveness of negative policy rates in particular, in the August Monetary Policy Report, in light of the decline in global equilibrium interest rates over a number of years. Subsequently, the MPC had been briefed on the Bank of England’s plans to explore how a negative Bank Rate could be implemented effectively, should the outlook for inflation and output warrant it at some point during this period of low equilibrium rates.
The outlook for negative interest rates added to other unfavorable factors, like the resurgence of new coronavirus cases in Britain and the threat of no-deal Brexit. As a result, the pound sank against all other most-traded currencies, even the New Zealand dollar, which started the trading session as the weakest currency.
GBP/USD dropped from 1.2968 to 1.2882 as of 13:24 GMT today. EUR/GBP rallied from 0.9113 to 0.9159. GBP/NZD dipped from 1.9256 to 1.9163 after rallying to the daily high of 1.9382 earlier.
© NewsInspector for Forex News, 2020. |
Permalink |
No comment |
Add to
del.icio.us
Post tags: Bank of England, EUR/GBP, GBP/NZD, GBP/USD, Interest Rates, Monetary Policy, Pound, United Kingdom
Feed enhanced by Better Feed from Ozh

The Subtle Art Of Orange-Pilling
The Subtle Art Of Orange-Pilling
Authored by Jesse Colzani via BictoinMagazine.com,
Every Bitcoin user has very different reasons for using…
Selling Into Daily S&P 500 Strength
S&P 500 staged a dead cat bounce following Thuursday‘s slide, and so did yields retreating a bit. Coupled with Japan … Read more
The Economist Gets It Wrong on Dollarization in Argentina
The Economist misunderstands the most fundamental aspects of Milei’s plan to dollarize Argentina and shut down its central bank.
-
Energy & Critical Metals21 hours ago
Basin drilling returns up to 0.27% uranium at Geikie, highlights ‘scale potential to produce a major discovery’
-
Economics18 hours ago
Scarcity Is Not Enough
-
Base Metals15 hours ago
US Steel partners with NETL to test new NETL membrane for carbon capture from steelmaking operations
-
Companies12 hours ago
NorthWest Copper Announces Property Sale Agreement
-
Uncategorized21 hours ago
Belararox eyes new targets to boost Belara 5Mt copper-zinc resource
-
Companies11 hours ago
West Red Lake Gold Strengthens Management Team
-
Companies21 hours ago
Fin launches into maiden fieldwork over Mt Tremblant lithium projects in the prolific James Bay
-
Companies15 hours ago
First Quantum Minerals to expand Kansanshi copper mine with MECS technology for smelter