Sterling gained on Thursday after the Bank of England held interest rates at 0.75%, defying money markets that had seen a 50% probability of a cut to help the economy.
Following the move, interest rate futures moved to almost price out a rate cut at the March meeting as well, reinforcing the pound’s gains. Money markets are still pricing in a quarter-point reduction by September, however.
“Both the hold and the vote will add upside pressure for the pound,” Neil Jones, head of FX hedge fund sales at Mizuho said.
Sterling rose to $1.3109, up...