The Euro was little moved against the Pound on Thursday after the Bank of England announced that it would be maintaining interest rates at the record low level of 0.5%.
The Bank’s Monetary Policy Committee (MPC) chose to maintain the Bank’s £375 billion quantitative easing programme. No press statement was released. Now markets will focus on next week’s quarterly inflation report due for release next Wednesday.
The chief economist at the British Chambers of Commerce backed the BoE decision; “Given the global uncertainties, and the still delicate state of the UK economy, the decision to hold both interest rates and QE was uncontroversial and appropriate. As British business has enjoyed the added stability and confidence that has come with the forward guidance policy, the speculation favouring an early interest rate rise is unhelpful and potentially damaging for the economy.”
The lack of any signs for a rate hike has made many traders and economists bearish against the Pound. As a consequence the currency is likely to remain under pressure over the next few days unless economic data surprises positively on the upside.
“The Inflation Report and press conference a week from today will likely give use further insight into the thoughts of the Bank,” Lee McDarby, a currency strategist at Nomura International Plc in London, said before the decision was announced. “Softer sterling certainly seems to have been the trend over the past week.”
Attention will now be focused on the European Central Bank’s rate decision and data out of the USA.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3511 ,
Euro,,British Pound,0.8289 ,
Euro,,Australian Dollar,1.5076 ,
Euro,,Canadian Dollar,1.4952 ,