LONDON (AFP) — The pound bounced higher against the dollar and the yen Tuesday but was down against the euro as the euro hit a new record high against the dollar.
Rate setter Tim Besley said the Bank of England's liquidity scheme announced Monday will help the rate setting committee focus on the job of keeping inflationary pressures in the United Kingdom's economy in check.
Besley, one of the four external members on rate setting panel, said the scheme should "allow the MPC to stay more focused on its task of using monetary policy to target inflation."
The pound had been under pressure on Monday following the announcement of the scheme as market players viewed the plan with scepticism and expressed concern over its expense.
"The tone of the Besley remarks is hawkish but measured and should at least afford the struggling pound some room to pause," said Thomson IFR Markets' Peter Stoneham.
Elsewhere, the dollar's woes continued for yet another day as sentiment was battered by further falls in US existing home sales.
The US unit sank to new record lows against the euro, at just above the 1.60 dollars level before coming back up slightly. Many believe levels above 1.60 dollars will eventually stick.
Data out this afternoon saw sales of previously owned homes in the US fall again last month after rising slightly in February. Sales declined 2.0 percent in March to an annual rate of 4.93 million units, from the 5.03 million unit pace in February. That pace is 19.3 percent below the sales pace of a year earlier.
In addition to falling sales, inventories rose about 1 percent to 4.06 million units, a level that would take about 9.9 months to deplete at the current sales pace.
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