Pound Retreats After BoE Holds Rate, Asset Purchase Program Steady
20 Dicembre 2018 - 9:23AM
RTTF2
The pound erased some of its early gains against its most major
counterparts in the European session on Thursday, as policymakers
of the Bank of England unanimously left the key interest rate and
asset purchase program unchanged, as expected.
The nine-member Monetary Policy Committee held its key interest
rate unchanged at 0.75 percent in line with economists'
expectations.
The stock of corporate bond purchases was kept at GBP 10 billion
and that of government bond purchases at GBP 435 billion.
The central bank reiterated that if the economy were to develop
as projected in November and there is smooth adjustment to the
possible Brexit outcomes, a margin of excess demand was expected to
emerge.
"In that context, an ongoing tightening of monetary policy over
the forecast period, at a gradual pace and to a limited extent,
would be appropriate to return inflation sustainably to the 2
percent target at a conventional horizon," the bank said.
Data from the Office for National Statistics showed that U.K.
retail sales rose for the first time in three months in November to
surpass economists' expectations.
The volume of retail sales including automotive fuel rose 1.4
percent from October, which was much faster than the 0.3 percent
growth economists had predicted.
The currency traded mixed against its key counterparts in the
Asian session. While it rose against the greenback and the franc,
it held steady against the euro. Against the yen, it dropped.
The pound eased back to 141.61 against the yen, not far from a
10-day low of 141.41 seen at 1:00 am ET. Next key support for the
pound is seen around the 140.00 mark.
The Bank of Japan left its ultra-loose monetary policy
unchanged, asserting its pledge to keep interest rate extremely low
for an extended period of time amid indications of global economic
slowdown.
The board maintained interest rate at -0.1 percent on current
accounts that financial institutions maintain at the bank. The
pound was trading weaker at 1.2535 against the franc, down from a
high of 1.2577 hit at 2:00 am ET. The pound is seen finding support
around the 1.23 level.
Having advanced to a 10-day high of 1.2707 against the greenback
at 6:15 am ET, the pound pulled back slightly with the pair trading
at 1.2669. The pound is likely to find support around the 1.25
level.
The pound held steady against the euro, following an 8-day low
of 0.9050 touched at 4:45 am ET. The pair was valued at 0.9020 when
it ended Wednesday's trading.
Looking ahead, Canada wholesale sales for October, U.S. leading
index for November and weekly jobless claims for the week ended
December 15 will be out in the New York session.
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