Though down a little Friday ahead ofr NFP, sterling climbed after the Bank of England left rates unchanged at 0.5 percent and maintained asset purchases at 375 billion pounds a month. Sterling is still down 5 percent for the year, but gains of recent days may continue as the bank waits for more data to show there was no double-dip recession. Expect the minutes of the meeting, set for release on June 19, to show a 6-3 division within the policy setting committee with more starting to lean to ending the period of easy money going forward.
Mervyn King, retiring after a 20-year career at the BoE, had argued since early this year, along with two others, for an extra 25 billion pounds of bond purchases to boost Britain's sluggish economic recovery. But most of the committee seem to reason signs of recovery mean there is no need for extra stimulus now. What Mark Carney will do when he comes on board in July, taking over from King, remains to be seen but overall it appears the British economy is mending and with tightening, or the announcement of tapering of the British version of QE, will come a higher pound.