GBP Surges as BoE Holds Rates, Japan's Intervention Weighs on USD

The British Pound surged against the US Dollar after the Bank of England's decision to hold interest rates unchanged in a 6-3 vote. This hawkish stance supported the Pound, while suspected intervention by Japan to prop up its currency weakened the Greenback.

The BoE voted 6-3 to keep the Bank Rate at 3.75%, with three dissenting members calling for a 25-basis-point rate hike. According to Governor Andrew Bailey, there is no evidence of second-round inflation effects, but the BoE is ready to adjust policy as the outlook evolves.

The suspected intervention by Japan sent the USD/JPY pair plummeting over 400 pips, causing the US Dollar Index (DXY) to reach a 30-day low. The DXY tracks the performance of the American currency against six other currencies and dropped over 0.60%.