At one point in the London session, the GBP/USD rose above the $1.300 level, a move not seen in nearly three weeks, before retreating.
The Pound Sterling edged higher against the US Dollar as FX traders dismissed the likelihood that the Bank of England will move to a negative rate environment any time soon. At one point in the London session, the GBP/USD rose above the $1.300 level, a move not seen in nearly three weeks, before retreating. Analysts don't see any shift to negative rates until at least the second quarter of next year. While some members of the BoE have said that they saw some likely benefits by lower rates, the BoE chief economist had said that he had doubts that a downward move would do any good. Both the EU and Japan have moved to negative rates, with a mixed outcome in both cases.
As of 11:11 am in London, the GBP/USD was trading at $1.2970, down 0.0285%, and sliding away from the session peak of $1.30078. The EUR/GBP was higher at 0.9083 Pence, up 0.1135%; the pair has ranged from a low of 0.90600 Pence to a peak of 0.90883 Pence.
RBA Leaves Rates Untouched
Earlier in the trading session, the Reserve Bank of Australia released its monetary policy decision and left interest rates unchanged at current low levels. Market analysts say that the bank is waiting for action from the Australian government which is due to release its budget momentarily. Expectations are high that the budget will contain plans to stimulate the economy through newly created spending plans, and new tax-cutting measures, among other ideas intended to boost the economy. Labor data is also due to be released, and the RBA said that they believe conditions have improved. The AUD/USD was trading at $0.7153, down 0.3832%, off the session high of $0.72093.