GBPUSD reclaims $1.35 mark; Bank Of England stands pat on rates

The British pound extended sharp upside on Friday tracking mild weakness in dollar amid lack of activity as US markets were closed on June 19 in observance of Juneteenth. Meanwhile, Bank of England yesterday decided to keep interest rates unchanged after cutting it by a quarter-point last month. The Monetary Policy Committee voted 6-3 to hold the Bank Rate at 4.25%. Three members preferred to reduce the rate by 25 basis point. The central bank noted that there has been substantial disinflation over the past two years, as previous external shocks have receded, and as the restrictive stance of monetary policy has curbed second-round effects and stabilised longer-term inflation expectations. This has allowed the MPC to withdraw gradually some degree of policy restraint, while maintaining Bank Rate in restrictive territory so as to continue to squeeze out existing or emerging persistent inflationary pressures. For the day, investors await UK retail sales for May. Nevertheless, broad strength in dollar amid the ongoing Middle East turmoil could also limit gains the counter. GBPUSD is currently quoting higher by more than half a percent on the day at $1.3502. On the NSE, GBPINR futures are up 0.33% at 116.87.

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