Pound Mixed After BoE Decision
23 Marzo 2023 - 4:10AM
RTTF2
The pound showed mixed performance against its major rivals in
the European session on Thursday, after the Bank of England raised
its benchmark rate by 25 basis points and signalled further
tightening if there are signs of persistent price pressures.
The nine-member Monetary Policy Committee decided to lift the
bank rate to 4.25 percent from 4 percent. This was the highest rate
since 2008.
Seven members of the panel voted for a quarter point hike, while
Swati Dhingra and Silvana Tenreyro again sought to maintain the
status quo.
Most of the members observed that headline inflation had
surprised significantly on the upside and the near-term path of GDP
was likely to be somewhat stronger than expected previously.
"Renewed and sustained demand for labor could still reinforce
the persistence of higher costs in consumer prices, even if
second-round effects related to energy price inflation were to
diminish," the minutes said.
The MPC vowed to continue to monitor closely indications of
persistent inflationary pressures, including the tightness of labor
market conditions and the behavior of wage growth and services
inflation.
"If there were to be evidence of more persistent pressures, then
further tightening in monetary policy would be required," the panel
said.
The pound pulled back to 1.2264 against the greenback, from a
1-1/2-month high of 1.2343 hit at 3:25 am ET. The currency may find
support around the 1.19 level.
The pound touched 0.8865 against the euro, its lowest level
since March 10. The pound had ended yesterday's trading session at
0.8845 against the euro. On the downside, 0.90 is possibly seen as
its next support level.
The pound eased off to 1.1245 against the franc, heading to
pierce a 6-day low of 1.1228 seen at 4:30 am ET. At Wednesday's
close, the pair was worth 1.1239. The pound is seen finding support
around the 1.11 level.
The pound rose to 161.84 against the yen, from a 3-day low of
160.68 it touched in the previous session. The pair was valued at
161.10 when it ended trading on Wednesday. The pound is likely to
find resistance around the 164.00 level.
Looking ahead, Eurozone flash consumer sentiment index for March
will be out at 11 am ET.
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