GBP weakens against Euro following BOE meeting

The minutes of April’s Bank of England meeting showed most members voted against tightening monetary policy, causing the pound to fall against the euro.

Reacting to data from last month that indicate a weaker economy, BOE policy makers voted 6-3 to keep the benchmark rate at a record low 0.5 percent. Short-sterling futures rose as investors pared bets on an increase in interest rates.

“Markets should be a little surprised to find no further members voted for an increase in rates,” said Neil Jones, head of European hedge fund sales in London at Mizuho Corporate Bank Ltd. “The pound is being sold as a reflex action by disappointed bulls.”

The pound depreciated 0.7 percent to 88.63 pence per euro at 4:30 p.m. in London, and earlier lost 1 percent, its biggest intraday drop since March 24. Against the dollar, sterling gained 0.5 percent to $1.6376. It slipped 0.4 percent in a basket of 10 developed-market currencies.

Source:  Bloomberg

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