The pound traded near the strongest level in more than three months against the euro before the Bank of England and European Central Bank set policies today.
Sterling held a six-day gain as positive economic data outweighed prospects that BOE Governor Mark Carney will reiterate his intention to keep rates low until unemployment falls to 7 percent. The dollar advanced toward a six-week high against the euro amid speculation signs of improvement in the U.S. economy will compel the Federal Reserve to taper stimulus this month. The yen strengthened against most major peers after the Bank of Japan left its easing program unchanged.
“The market is responding more to positive economic data in the U.K. than to what the Bank of England Governor has been saying, resulting in a stronger sterling,” said Khoon Goh, a senior currency strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Singapore. “There’s probably still further downside in euro-sterling.”
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