Pound Off Lows As BoE Holds Rate Unchanged In Split Vote
14 January 2016 - 7:49PM
RTTF2
The pound trimmed its early losses against its key counterparts
in European deals on Thursday, as the monetary policy committee of
the Bank of England voted 8-1 to hold interest rate at 0.50
percent.
The rate has been at the current level since early 2009.
The MPC voted unanimously to maintain quantitative easing at GBP
375 billion.
Ian McCafferty again sought a quarter point hike in rates as he
viewed that the risks to domestic cost growth remained to the
upside, and given the recent depreciation of sterling, were less
likely to be offset by the drag from earlier sterling
appreciation.
The actual path that interest rate will follow over the next few
years will depend on the economic circumstances, the bank said in
its monetary policy summary.
The pound that was slightly higher against most major rivals in
the previous session slipped during early European deals.
Subsequent to the BoE decision, the pound reversed from its
early 1-year low of 0.7607 against the euro and more than a 2-year
low of 168.83 against the yen, recovering to 0.7556 and 169.90,
respectively. The next possible resistance for the pound is seen
around 0.74 against the euro and 172.00 against the yen.
Bouncing off from its prior 2-day lows of 1.4360 against the
greenback and 1.4392 against the franc, the pound ticked up to
1.4437 and 1.4489, respectively. If the pound extends gain, it may
locate resistance around 1.46 against both the greenback and the
franc.
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