Pound rallies after BOE maintains size of bond-buying program

The British Pound Sterling recovered from a two-week low after the Bank of England (BOE) announced that it had decided to maintain the size of its bond-buying program.

The UK central bank had previously slashed its benchmark interest rates to a record low of 0.1% and had pledged to buy a debt of £200 billion ($250 billion).

The Sterling gained 0.2% to $1.2369 at 7:07 AM in London, after it had slipped by nearly 0.3% before the announcement.

The COVID-19 crisis in March brought the Pound to its lowest level since 1985 but has since taken back lost ground in April, last trading at around $1.25. However, the outlook on the United Kingdom’s economy remains gloomy, with the Office for Budget Responsibility seeing a possible 13% contraction in GDP for 2020.

Investors are eyeing the opening of the GILT market at 8:00 AM in London time. GILT futures for June delivery are expected to open between 137.62 and 137.83 depending on the movement from Bund and Treasury futures. Gilt futures last traded at 137.71 on Wednesday.

The briefing with BOE Governor Andrew Bailey will be published two hours later.