Pound Retreats After BoE Decision
18 March 2021 - 9:03PM
RTTF2
The pound pulled back against its key counterparts in the
European session on Thursday, after the Bank of England kept its
benchmark rate and quantitative easing program unchanged.
The nine-member Monetary Policy Committee, headed by Governor
Andrew Bailey, voted to hold the interest rate at 0.10 percent and
the quantitative easing at GBP 895 billion in the latest policy
meeting.
All members of the MPC judged that the existing stance of
monetary policy remained appropriate.
The committee said it did not intend to tighten monetary policy
at least until there was clear evidence that significant progress
was being made in eliminating spare capacity and achieving the 2
percent inflation target sustainably.
If the outlook for inflation weakened, the committee stood ready
to take whatever additional action was necessary to achieve its
remit, the bank said.
The currency showed mixed trading against its major counterparts
in the Asian session. While it rose against the greenback and the
franc, it held steady against the euro. Versus the yen, it
fell.
The pound declined to 1.3914 against the greenback, after rising
to a 6-day high of 1.4001 at 3:00 am ET. The pair had finished
Wednesday's deals at 1.3959. The pound is poised to find support
around the 1.35 mark.
The pound eased off to 151.90 against the yen, from near a
3-year high of 152.55 seen at 4:00 am ET. On the downside, 149.00
is likely seen as the next support for the pound.
Reversing from more than a 1-year high of 0.8533 hit at 7:00 am
ET, the pound dropped back to 0.8572 against the euro. Next key
support for the pound is seen around the 0.88 level.
Data from Eurostat showed that the euro area trade surplus
decreased in January from the previous month on weak exports.
The trade surplus fell to a seasonally adjusted EUR 24.2 billion
from EUR 27.5 billion in December.
In contrast, the pound held steady against the franc, after
touching a 3-day peak of 1.2959 at 7:50 am ET. At Wednesday's
close, the pair was worth 1.2869.
Data from the Federal Customs Administration showed that
Switzerland's exports declined in February after rising in the
previous month.
Exports fell by a real 1.4 percent month-on-month in February,
after a 6.0 percent growth in January. In December, exports
decreased 6.1 percent.
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