“The pound fell for the first time in three days against the dollar as Bank of England policy makers begin a two-day meeting to decide whether to add more stimulus to the economy to spur growth.
The U.K. currency weakened against all except one of its 16 major counterparts as 11 of the 39 economists surveyed by Bloomberg predict the central bank will increase its asset- purchase target to at least 400 billion pounds ($603 billion) from the current 375 billion pounds. Sterling strengthened yesterday as a report showed U.K. services expanded in February. U.K. government bonds were little changed.
“The risk, if there is a surprise at all, is that there will be more asset purchases and that will weigh on sterling,” said Raghav Subbarao, a foreign-exchange strategist at Barclays Plc inLondon. “Our base case is that there won’t be any change in policy tomorrow.”
The pound dropped 0.2 percent to $1.5097 at 12:17 p.m. London time after falling to $1.4986 on March 1, the weakest level since July 2010. The U.K. currency declined 0.1 percent to 86.38 pence per euro.
Sterling has slumped 5.5 percent this year, the second worst performer after the yen among the 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 2.6 percent and the euro rose 1.2 percent….”
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