Forex - Pound eases on news of split vote to hike rates UPDATE |
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Published
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Wed, 24 Jan 2007 11:12
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(Updating with analyst comment)LONDON (AFX) - The pound eased to its lowest in two-days against the dollar after the Bank of England's minutes revealed the hike in borrowing costs earlier this month came as a result of the closest vote possible.The minutes were expected to a show a 7-2 vote in favour of the hike to 5.25 pct. However, a 5-to-4 margin was revealed.The news knocked the pound to lows of 1.9700 usd, from 1.9741 usd. The euro rose to 0.6598 stg, from 0.6580 stg.'The odds now probably move away from a further rate hike in February as the Monetary Policy Committee will want to wait and see how inflation spans out this month,' said David Brown at Bear Stearns.'There is still a tightening bias implied to policy and a move to 5.50 pct rates is probably in the frame by the end of the first quarter,' he added.As such, a test of the 2.00 usd level is off the cards for the time being, Brown said.The pound's falls were limited, however, as UK GDP data came in on the strong side, rising by 0.8 pct in the final quarter against predictions of 0.7 pct.sivakumar.sithraputhran@thomson.comss/am/ss/amCOPYRIGHTCopyright 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 eases on news of split vote to hike rates 