Pound Rises Against Dollar

The pound rose against the dollar and the euro as the Bank of England indicated it's prepared again to cut interest rates, now at the lowest level since 1955, to revive the economy.

Bank of England policy makers, led by Governor Mervyn King, considered a bigger reduction in the benchmark interest rate than the 1.5 percentage points announced Nov. 6, according to the minutes of their meeting preceding that decision.

The pound climbed 1.8 percent to $1.5224, the highest level since Nov. 12, as of 2:39 p.m. in London, from $1.4958 yesterday. The U.K. currency is down 23 percent against the dollar this year. Against the euro, it climbed to 84.06 pence, from 84.35 pence, reducing its decline this year to 13 percent. It reached a record low of 86.63 pence last week. Investors should use gains by the pound as an opportunity to sell the currency, Jones said, without providing a forecast.

Britain's currency extended gains against the dollar after a government report showed U.S. consumer prices plunged 1 percent last month, more than forecast and the most since records began in 1947. The pound also rose as the dollar declined against the euro after passing $1.27, a level where orders to buy the 15- nation currency were clustered.

TradingEconomics.com, Bloomberg
11/19/2008 8:06:08 AM