Sterling strengthens after rate decision

Sterling was helped Thursday by the Bank of England’s decision to cut UK interest rates from 5.75 percent to 5.5 percent.

In early afternoon trade in New York it took $2.0299 to buy a pound and the yen was trading at ¥225.5621 to the pound after having been at ¥224.6246 to the pound at about the same time on Wednesday.

Meanwhile, the European Central Bank held interest rates steady at 4 percent as the Bank’s President, Jean-Claude Trichet, made comments that seemed to rule out any possibility of any rate cuts in the near term.

The euro traded at €1.3856 to the pound while it took $1.4650 or ¥162.7908 to buy one euro at early afternoon in New York.

In other interest rate news, South Africa’s central bank raised interest rates there from 10.5 percent to 11 percent, sending the rand up against all 16 of the globe’s most actively traded currencies.

Elsewhere, the yen and Swiss franc both weakened as investors returned to risky carry trades.

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