The Pound has slid for a third day against the Euro and has hit its lowest level since October 2011 after the Bank of England revealed that some of its policy officials voted to increase its quantitative easing programme.
The minutes for the Bank of England’s policy meeting for February showed that Governor Mervyn King supported Paul Fisher and David Miles in voting to increase the target for bond purchases to £400 billion. The minutes also revealed that policy makers had been considering a possible interest rate cut.
“2013 just goes from bad to worse for the Pound as this morning’s MPC minutes came out with a surprisingly bearish vote,” said Lee McDarby, head of dealing on the corporate and institutional treasury desk at Investec Bank Plc in London. “This continues the snowball of gloominess which has been gathering pace against sterling with the downside risk now getting more worrying for the friendless Pound.”
The UK also released its latest jobless claims figures. The data showed that the number of claims fell more than twice as much as forecast in January as new job creation soared. According to the Office for National Statistics unemployment claims fell by 12,500 from December to 1.54 million. Economists and policy makers have struggled to explain the strength of the labour market at a time when growth is weak. Possible explanations include an increase in self-employment and part-time work and downward pressure on wages, which is reducing the pressure on companies to cut costs.
The better-than-expected jobs data has done very little to reverse the Pounds losses.
The Euro meanwhile has strengthened against the US Dollar for a second day due to expectations that the European Commission’s latest consumer confidence index showed signs of improving.
“The Euro continues to respond to the stabilization — and it’s no more than that — in the Euro zone,” said a strategist at Westpac Banking Corp. “But it’s a positive signal for market confidence. Investors are feeling better, or at least no worse, about prospects for the region.”
As of 11:00 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8689
The Euro to US Dollar exchange rate is currently trading in the region of 1.3414
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2953
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5975
The Euro to Canadian Dollar exchange rate is currently trading in the region of 1.3566
The Euro to Emirati Dirham exchange rate is currently trading in the region of 4.9263
The Euro to Swiss Franc is currently trading in the region of 1.2341
The Euro to Japanese Yen exchange rate is currently trading in the region of 125.2602