Pound continues to rally as BoE returns a level of confidence to the economy

The pound was able to reverse a three-day slide against the single currency yesterday, as investor confidence was buoyed by the BoE’s decision not to extend the QE programme.

• Trading was strictly range bound yesterday morning, as investors were cautious of taking short positions ahead of the Bank of England rate decision.
  
• In the afternoon however, the pound advanced as the BoE left interest rates on hold at 0.5% and left its asset-purchase budget unchanged £175 billion.
  
• The pound recovered to trade well above the 1.14 level as improved investor sentiment toward the Britain's economic recovery strengthened demand for sterling.
  
• Weakening equities did cap the pound’s gains though to 0.45%, closing the day at 1.1416.