Sterling was under pressure yesterday as the minutes revealed indecision over the extension to QE

Sterling was under pressure in trading yesterday, losing half a cent to the dollar as a report revealed a split vote over the extension of quantitative easing among the MPC members.

• Sterling was pushed to session lows after the minutes showed a three-way split of the asset purchase scheme: one member had voted for an increase of £40 billion, where as one was in favour of no extension at all. The other seven all agreed upon the £25 billion that was actually implemented.
  
• Analysts noted that the inclusive nature of the minutes suggested that further monetary easing was still on the table, which weakened sterling.
  
• In addition, the committee discussed the merits of cutting the base interest rate from the current 0.5%. Although they concluded that it was not currently necessary, the mention of it dulled demand for the pound.
  
• The dollar extended gains after weak US housing data reduced appetite for risk. The Commerce Department reported that US housing starts dropped last month to an annual rate of 529,000, from a revised 592,000 in September.
  
• The pound has lost further ground this morning, currently down a further cent, as softer equities during the US and Asian sessions dampen risk appetite.