The pound showed mixed trading against its major rivals ahead of the Bank of England's rate decision, which is due to announce at 7:00 am ET. While the sterling edged higher against the dollar and the yen, it held steady versus its major European peers.
Policymakers of the Bank of England is set to adopt a "wait and see" stance at the start of the year as policymakers see little compelling case for another stimulus.
The Monetary Policy Committee headed by Mervyn King is expected to keep the size of its bond buying program unchanged at GBP 375 billion and the interest rates unchanged at record low 0.50 percent.
The previous increase in the size of the central's bank's QE program was in July. At the December meeting, David Miles sought a GBP 25 billion increase in QE, saying that the case for undertaking additional asset purchases was strong.
At the same time, the other members of the MPC said the immediate risks emanating from the euro area seemed less pressing than they had in the summer and that the early signs of the Funding for Lending scheme were encouraging.
The pound advanced to a 3-day high of 141.73 against the yen and a session's high of 1.6073 against the dollar just ahead of the rate decision. After posting steep losses in the previous session, the British sterling held steady at 0.8160 against the euro and 1.4820 against the Swiss franc ahead of the BoE.
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Forex News
August 21, 2026 14:42 ET The minutes of the latest policy meeting of the Federal Reserve, housing market data and manufacturing sector survey results were the main news for the U.S. economy this week. In Europe, inflation data from the U.K. was the highlight, while consumer price data from Japan drew attention in Asia.