LONDON (Reuters) - Sterling was on track for a weekly gain versus the dollar on Friday, as traders digested U.S. election results and a fresh splurge of bond buying by the Bank of England.
Currencies considered riskier, including the pound, have strengthened as Democratic candidate Joe Biden has taken the lead over President Donald Trump in key states, putting him on the verge of winning the White House.
The pound is up more than 1% for the week against the broadly weaker dollar, although it fell back around a fifth of a percent on the day to trade around the $1.31 mark.
Sterling lost ground elsewhere against the euro - one of the big gainers this week - falling around 0.5% on the day.
Concern about the terms of Britain’s exit from the European Union still weighed on the pound, after senior EU official Thierry Breton said there was a “50/50” chance of a trade deal, with negotiations expected to continue over the weekend.
Britain is confident it has made significant preparations for the end of its Brexit transition period, a spokesman for Prime Minister Boris Johnson said.
The Bank of England on Thursday said it was increasing the size of its already huge bond-buying stimulus by a larger-than-expected 150 billion pounds ($197 billion), as it braced for more economic damage from coronavirus lockdowns.
BoE Deputy Governor Ben Broadbent said on Friday the central bank expects more than 9 million employees will be on the government’s extended furlough job-support scheme in the spring.
“While the (BoE’s) Monetary Policy Committee (MPC) increased the Asset Purchase Facility by GBP 150bn, more than the GBP 100bn that the market expected, there was no change in rates and, significantly, no mention of negative rates,” Marshall Gittler, head of investment research at BDSwiss Group, said in a note.
“Moreover the MPC projected that inflation would return to the target 2% level by the end of next year even without further rate cuts. Now that that’s out of the way, it’s back to worrying about Brexit.”
Reporting by Iain Withers; editing by Larry King
Our Standards: The Thomson Reuters Trust Principles.