Pound Down Following Interest Rate Decision

“You only need the hard data to come in roughly as poor as some of the early surveys suggest and you should see the market factor in” more QE, or a further rate cut this year. Oil prices rose for the second day in a row, something that hadn’t happened for nearly three weeks.

The BoE’s new Term Funding Scheme (TFS) – unlike 2012’s Funding for Lending Scheme – was not aimed at boosting lending but instead at ensuring lenders passed on the latest cut in interest rates, Broadbent said.

While the first half of 2016 saw relatively strong growth, this is expected to fall in the second half.

“The market has been surprised before and wants to make sure that they’re prepared in either direction”, she said. “In response, both gilt yields and sterling have fallen, while equity markets have moved higher”. The stock rose $1.19, or 11.4 percent, to $11.63.

The Bank’s governor, Mark Carney, said to journalists after the meeting: “The banks have no excuse, with today’s announcements, not to pass on the cut in bank rate and they should write to their customers to make that point”.

Recent firmness in iron ore prices and a search for yield among investors have helped support the Australian dollar, said Roy Teo, senior FX strategist for ABN AMRO Bank in Singapore.

The pound fell to 1.3116 USA dollars from 1.3317 dollars on Wednesday.

His comments highlight the Bank of England’s signal on Thursday that rates could go lower if the economy worsens.

The dollar bounced back a bit from Monday’s five-week low against a basket of six major currencies as investors looked to Friday’s payrolls data.

The British pound traded at $1.3325, keeping some distance from its three-decade low of $1.2798 hit nearly a month ago, although currency markets may be somewhat ambivalent over how to react to the BoE decision – buy sterling if the BoE cuts, sell if it doesn’t, or vice versa?

SQUARE ONE: Mobile payments company Square climbed after it reported strong second-quarter results and raised its projections for the year. The stock rose 88 cents (67p), or 8.4%, to 11.32 dollars (£8.63). Brent crude, used to price global oils, fell 22 cents to $44.07 in London. Its stock lost $5.65, or 8.1 percent, to $63.84. It’s on track for a 0.4 percent gain for the week. Callaway surged 64 cents, or 6 percent, to $11.22. The euro was steady at $1.1131, set to end the week 0.4% lower. Silver fell 3 cents to $20.44 an ounce.

The pound has weakened by about 15 per cent against the Singdollar starting 2016 at S$2.0847.

In the eurozone on Friday, Frankfurt’s DAX 30 added 0.2 percent to 10,242.88 points and the Paris CAC 40 won 0.4 percent to 4,362.94.

Japan’s Nikkei advanced 0.3 per cent, on track for a loss of 1.6 per cent for the week.

OVERSEAS: Britain’s FTSE 100 rose 1.6 percent.

The pound fared less well though, falling 1.4% against the dollar and 1.3% against the Euro, meaning holidaymakers will get less for their money. South Korea’s Kospi added 0.3 percent and Hong Kong’s Hang Seng index gained 0.4 percent.