The GBP/USD exchange rate was little moved but holding close to a four-year high after the Bank of England’s decision to maintain interest rates at record low levels and as US data showed that jobless claims fell to a three month low.
The Bank of England decision to keep interest rates at the record low-level of 0.5% and keep its quantitative easing programme on hold at £375 billion was widely anticipated by the markets.
Howard Archer, chief economist at IHS Global Insight, said: “The Bank of England clearly wants to nurture recovery and not to risk choking it off by raising interest rates too early or too fast.”
The Pound found support early in the session after a housing price report showed that UK house price growth accelerated last month by the fastest pace in close to five years.
In the US data showed that few Americans than expected filed applications for unemployment benefits. According to the Labour Department, jobless claims fell by 26,000 to 323,000 in the week ending March 1st. The decline was the biggest drop recorded in three months.
A separate report showed that the number of US companies planning job cuts fell in February. U.S. employers planned to cut payrolls by 41,835 in February, down 7.3% from January’s 45,107 planned layoffs, according to a report by Challenger, Gray & Christmas. The February cuts compared with 55,356 planned cuts in the year-earlier month, down 24%.
Most economists will be looking ahead to Friday’s US balance of trade, unemployment rate and non-farm payrolls data.
US Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5981 ,
US Dollar,,Euro,0.7248 ,
US Dollar,,Australian Dollar,1.1049 ,
US Dollar,,Canadian Dollar,1.1008 ,
[/table]
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