EURGBP At Daily Low After The Bank of England Rate Decision
EURGBP tumbled to 0.8419 after the Bank of England kept its base rate unchanged at 0.75%. Seven members voted for the rates to stay on hold while two members, Saunders and Haskel voted to cut the bank rate to 0.50%. That was Mark Carney’s final interest rate decision.
The BOE Committee voted to maintain the stock of sterling corporate bond purchases, at £10 billion. The Committee also voted unanimously to maintain the stock of UK government bond purchases, at £435 billion.
The latest economic data suggest that the uncertainty facing businesses has fallen, and that global growth has stabilised. BOE expect uncertainty to shrink further and growth to pick up. A drop in global risks, should also help to support growth in the UK.
If that does not happen, then BOE may need to lower the interest rates to support UK growth and ensure that the inflation remains around 2%.
If the UK economy develops as BOE estimates, then upward pressure on prices should increase over the next few years. In that case, the BOE may proceed to a modest increase in interest rates to keep inflation at the 2% target.
EURGBP is 0.40% lower at 0.8420 as the pair lost over 50 pips after the Bank of England kept the interest rate unchanged.
On the downside, immediate support for the EURGBP pair stands at 0.8419 the daily low. Next level to the downside would be the January 24th low at 0.8387. If the pair breaks that level then the next support will be met at 0.8352 the low from December 17th.
On the flip side, first resistance for the pair will be met at 0.8487 the daily top. The next resistance stands at 0.8495 the 50-day moving average. If ther pair surpass that level the next resistance will be met at 0.8536 the high from January 24st.