Pound Advances After BoE Holds Fire On Rate
September 13 2018 - 4:24AM
RTTF2
The pound climbed against its most major opponents in the
European session on Thursday, after the policymakers of the Bank of
England unanimously decided to maintain interest rates and
quantitative easing after a quarter point rate hike in August.
The Monetary Policy Committee or MPC, led by Governor Mark
Carney, voted to keep the key rate unchanged at 0.75 percent. The
MPC also unanimously decided to maintain the quantitative easing
through asset purchases at GBP 435 billion.
If the economy would continue to develop broadly in line with
the August Inflation Report projections, an ongoing tightening of
monetary policy over the forecast period would be appropriate to
return inflation sustainably to the 2 percent target, Policymakers
said.
The MPC reiterated that any future increases in Bank Rate were
likely to be at a gradual pace and to a limited extent.
Data from the Royal Institute of Chartered Surveyors showed that
U.K. house price balance dropped in August largely due to the
weakness in London.
The national house price balance slid to 2 percent in August
from 4 percent in July.
The pound declined against its major counterparts in the Asian
session, with the exception of the yen.
The pound appreciated 0.4 percent to 0.8892 against the euro,
from a low of 0.8924 hit at 2:30 am ET. The pair was valued at
0.8909 when it closed deals on Wednesday. The pound is seen finding
resistance around the 0.87 mark.
Final data from Destatis showed that Germany's consumer price
inflation held steady, as initially estimated in August.
Consumer price inflation remained stable at 2 percent in August,
in line with the estimate published on August 30. The rate reached
the 2 percent mark for the fourth consecutive month.
The pound added 0.3 percent to hit 1.3068 against the greenback,
following a decline to 1.3026 at 2:00 am ET. At yesterday's close,
the pair was worth 1.3044. Next key resistance for the pound is
seen around the 1.32 region.
The U.K. currency climbed to a 2-day high of 145.76 against the
yen, after falling to 145.01 at 5:30 pm ET. The pound was trading
at 145.13 against the yen at Wednesday's close. The pound is poised
to find resistance around the 148.5 area.
Data from the Bank of Japan showed that Japan producer prices
were flat on month in August.
That was beneath expectations for an increase of 0.1 percent
following the downwardly revised 0.4 percent gain in July.
On the flip side, the pound retraced its early gains against the
franc with the pair trading at 1.2635. This is just few pips short
of a session's low of 1.2629 seen at 2:45 am ET. The pound may
possibly challenge support around the 1.23 level, if it falls
further.
Looking ahead, at 7:45 am ET, the European Central Bank will
deliver its monetary policy announcement. The main refi rate is
expected to be held at a record low of zero percent and the deposit
rate at -0.40 percent.
In the New York session, Canada new housing price index for
July, U.S. CPI for August, weekly jobless claims for the week ended
September 8 and monthly budget are scheduled for release.
At 10:00 am ET, Federal Reserve Governor Randal Quarles will
testify on the implementation of the economic growth, regulatory
relief, and the Consumer Protection Act before the Senate Banking
Committee in Washington DC.
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