Sterling falls on expectations of more QE Major currencies struggled on Wednesday morning as markets looked to central banks for guidance and forecast further easing measures on both sides of the Atlantic. After originally falling sharply, sterling recovered to shrug off the release of the BoE's minutes from its last policy meeting in early June which furthered a belief, already strengthened by falling UK inflation, that the Bank of England would increase its asset purchase programme at its next meeting in July. According to the minutes, five members of the its Monetary Policy Committee voted to hold the asset purchase programme steady at its current level of £325bn while four members, including governor Mervyn King, voted to increase it by between £25bn and £50bn. Furthermore, the minutes revealed that "most members judged that some further economic stimulus was either warranted immediately or would probably become warranted." Analysts are forecasting a further £50bn of extra asset purchases will be announced at July's policy meeting. Sterling fell 0.4 per cent against the US dollar to $1.5664 and 0.4 per cent against the Japanese yen to Y123.56 immediately following the release but recovered to trade up 0.2 per cent against both currencies as markets focused on a similar chance of easing on the other side of the Atlantic and in Japan. The Bank of Japan's minutes from its own policy meeting in May suggested that a worsening of the eurozone crisis would see the BoJ "stand ready to take appropriate actions without ruling out any options in advance." And market participants were forecasting an extension of the US Federal Reserve's asset purchase programme, Operation Twist, while others were expecting more drastic monetary easing to be announced after the Federal Reserve's Federal Open Market Committee meeting later on Wednesday. Any such move would weigh on the US currency. The US dollar index fell 0.1 per cent to 81.3 points on Wednesday and the dollar lost 0.2 per cent against the single currency to $1.2706 as Greece moved closer to forming a three-party coalition government and the single currency shrugged off a margin hike by Europe's pivotal clearing house LCH Clearnet SA. The euro was helped by reports from the G20 summit in Mexico that there is a commitment to driving down borrowing costs across the single currency area. However, analysts suggested the euro may be vulnerable once some certainty is restored to markets following the US Fed's decision. Elsewhere, the Norwegian krone was up 0.6 per cent against the dollar to NKr5.9070 and up 0.5 per cent against the euro at NKr7.5016 as the Norwegian central bank kept its main interest rates unchanged.