Pound: Widening Of Daily Gilt Purchase Operations By BoE

The pound increased with about 0.2% against the dollar in the New York trading session and trades around $1.10 in the rate while the month weakened slightly with 0.7%.

The Bank of England announced the widening of the daily gilt purchase operations to include purchases of inflation-linked gilts, followed by an increase of a long-dated gilt market buying program with a daily limit of 5 billion to 10 billion pounds for the rest of the week.

This move targets to support the market while the gilt purchase program ends on October 14th as of the tightening.

The pound has been under pressure for months by the strong dollar and the Fed’s aggressive monetary policy stance as concerns of the British economic outlook and a new tax cut plan pressured the currency lower by potential higher demand. 

Hence higher demand led to the high inflation and there are some doubts about the BoE whether it will be able to protect the economy and to fight inflation.

The daily interval decreased for the fourth consecutive session in the row, trades below the Quarter’s developing value while seemingly closing with an outside bar today, hinting to a potential change in the market context.

(Click on image to enlarge)


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