The Pound to US Dollar Exchange Rate stands at 1.587

The Pound to US Dollar Exchange Rate stands at 1.587 as of 12:18 GMT. The Pound to US Dollar Forecast will be determined by the Bank of England’s monetary policy committee; more Quantitative Easing equals negative GBP/USD outlook; maintaining of current asset purchasing scheme equals positive Pound to US Dollar Exchange Rate Forecast.

The Pound is holding strong against the US Dollar today after making advances yesterday on the back of the Euro’s strong performance and a global trend towards risk appetite. Reports yesterday indicated that the Greek debt negotiations were finally coming to a close, and although they have been suggesting this for weeks with no closure, it caused markets to support the Euro; making the single currency the day’s best performer 1.5 cents up on the US Dollar.

The Bank of England’s monetary policy committee have begun their 2-day meeting to discuss the interest rate and asset purchasing schemes to be announced midday Thursday. The widely accepted general consensus suggests the BoE will maintain its benchmark interest rate of 0.50%. But in a survey of 50 economists conducted by Bloomsberg, 49 predicted an expansion beyond the current level on of Quantitative Easing. Speculation suggests the BoE will decide to add a further £50 billion or £75 billion to the current £275 billion asset purchasing target.

If the QE rumours bear fruit then a Sterling selloff seems likely as the currency would suffer from devaluation, but a secondary stream of rumours has entered circulation following a bout of stronger than expected UK economic figures that the central bank may delay further monetary involvement. PMI for Services and Manufacturing both grew more than expected in January by 2.7% and 2.1% respectively. Retail Sales also improved by 0.6% adding to the potential motive behind a policy non-decision. If the BoE maintain their wait-and-see approach, it could prompt another Pound rally as markets re-adjust their outlook in relation to QE.

However, Mortgage Approvals dropped by over 1,000, Fourth Quarter Gross Domestic Product declined by -0.2%, and Unemployment rose to a 16-year high of 8.4% – and these figures could easily stem economic optimism enough for the BoE to proceed with its asset purchasing amplifications. Drastic measures may be deemed necessary by the BoE to avoid a double-dip recession, but they will prove hurtful for the British Pound.