Sterling above 1.54 handle after BoE Meeting Minutes
As it was largely expected BoE left interest rates and asset purchase unchanged. The nine-member Monetary Policy Committee voted 8-1 this week to keep its benchmark interest rate at a record-low 0.5 percent, with only Ian McCafferty dissenting. In their discussion, officials said any external headwinds must be “weighed against the prospects for a continued healthy domestic expansion.”
“Global developments do not as yet appear sufficient to alter materially the central outlook described” in the August Inflation Report, the MPC said. “But the greater downside risks to the global environment merit close monitoring for any impact on domestic economic activity.”
The BOE also stuck to its view that inflation will start to pick up around the turn of the year, though it noted that a drop in oil prices had increased uncertainty about the near-term outlook. It also said there’s considerable uncertainty about how the pound’s strength will feed through to U.K. inflation.
Sterling was pushed higher after the data and is currently being traded around 1.5450 handle. Pair is likely to find support around 1.54 level and resistance above 1.55 area. Later today, in the US session, Unemployment Claims figures are scheduled for a release.
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