Forex - Pound a touch softer as BoE keeps rates on hold as expected UPDATE |
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Thu, 08 Feb 2007 13:41
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(Adds analyst comment)LONDON (AFX) - The pound was a touch softer after the Bank of England (BoE) left its benchmark rate unchanged at a five-and-a-half year high of 5.25 pct, as widely expected.By 1206 GMT, the pound edged back to 1.9630 against the dollar from 1.9680 before the announcement, while the euro rose to 0.6613 against the pound from around 0.6600.Short-dated UK government bonds rose slightly, with the March short sterling futures contract up 4 ticks at 94.41 from 94.25 before the news.'The market had been priced for a 1-in-4 chance of a hike today, so the inaction will force some modest downward adjustment to near-term rate expectations and by extension may put the pound under some downward pressure,' said Daragh Maher at CALYON.'Nonetheless, with the economy still powering ahead and inflation well above target, we would expect the BoE to tighten rates further during second quarter of 2007, most likely at the May meeting,' he added.carlo.piovano@thomson.comcp/ss/jrCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Forex - Pound a touch softer as BoE keeps rates on hold as expected 