The British pound surged 0.5 percent against the dollar during the London trading session on Friday after being lifted by encouraging remarks from the Bank of England governor Mervyn King.
King said that “Recovery is finally in sight for Britain’s beleaguered economy” and that the bank’s monetary policy committee members are not trying to weaken the pound. He believes that the decline in the currency has gone far enough and that the pound is now “properly valued”.
The pound rose 0.5 percent to $1.5169 in mid-London session trading, the highest since March 5. Earlier this week the pound fell to a 2-1/2 year low of $1.4830 on growing speculation of more quantitative easing by the BOE. Sterling has regained 1.3 per cent since the start of the week.
Sterling also gained against the euro, pushing EURGBP to a 10-day low of 0.8603 during the European session, with Mervyn King’s GBP-supportive comments helping weigh on euro.