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Sterling supported after BoE; U.S. jobs data eyed

Fri Nov 6, 2009 5:51pm IST
 
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* Sterling inches up, holds gains after BoE ups QE funds * Focus on U.S. jobs data at 1330 GMT * Annual UK input price inflation turns positive in October

LONDON, Nov 6 (Reuters) - Sterling edged up versus the dollar on Friday, staying supported after the Bank of England raised its quantitative easing programme by less than many had forecast.

The pound traded close to a two-week high against a broadly weak dollar, though trade was thin as investors braced for closely-watched U.S. non-farm payrolls figures, the market's main event for the day, at 1330 GMT.

Thursday's 25 billion pound increase in the BoE's asset-buying plan was less than some forecasts for 50 billion pounds and broadly supported sterling, particularly as many in the market believe this top-up of the central bank's asset purchase programme will be the last.

"Clearly people are still trying to digest the news yesterday and to assess the implications for sterling of the end of QE," said David Woo, head of currency research at Barclays Capital.

"There is the question that if the Bank of England is buying fewer gilts, will that mean more foreign investors will be buying them?" he added.

By 1216 GMT, sterling GBP=D4 had edged up slightly to $1.6596, not far from $1.6637 hit on Thursday, its highest since Oct. 23.

Optimism that U.S. employment data may show a slowing pace of jobs losses stoked some risk appetite and helped prod the safe-haven U.S. currency lower.  Continued...

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