20
May
Pound strengthens against dollar
The pound has strengthened against the dollar, after Bank of
England minutes revealed that policymakers considered boosting
money supplies.
The prospect of the move, which could encourage lending -
stimulating the economy - boosted sterling.
By Wednesday afternoon, one pound could buy $1.5514, up from
Tuesday's close of $1.5350. A day earlier, sterling had reached a
five-month high of $1.5525.
The dollar was also weaker against both the euro and the
yen.
At noon, the euro was trading at 88.16p.
Meanwhile, the yen was hit by the announcement that the Japanese
economy had shrunk by more than 4% in the first quarter of
2009.
With analysts seeing indications of economic recovery, there are
signs that investors are moving away from the greenback, often
deemed a safe haven.
In January, the pound hit a 23-year low of $1.35 against the
dollar.
Last July, the pound was worth more than $2 but its value
plunged as signs emerged over the degree of the downturn in the
UK.
The May minutes also showed members had unanimously voted in
favour of keeping interest rate unchanged at 0.5%.
The Bank of England's minutes showed the bank was open to
increasing its quantitative easing plan by the maximum £75bn
permitted, which would help encourage lending.
Article from bbc.co.uk/news 20th May 2009