The Great Britain pound weakened today against the euro as investors reduced their bets on an interest rates hike after the release of the policy meeting minutes by the Bank of England. The currency gained versus the US dollar and the Japanese yen as the minutes pointed on some positive signs in Britain’s economy.
The Minutes of the Monetary Policy Committee Meeting spoke about unfavorable economic data that shows weakness of the UK economy. In particular, the consumer spending weakened as the household income decreased. There were also positive data, including the expansion of the manufacturing and services sectors. But the overall tone of the minutes was very cautions and it damped prospects for higher interest rates in the near future.
Analysts changed their forecasts, now predicting that the BoE will raise the interest rates in November by 25 basis points for the first time since the previous increase. Previously forecasters expected such increase in October.
EUR/GBP jumped from 0.8784 to 0.8876 and traded at 0.8848 today as of 21:17 GMT. GBP/USD rose from 1.6312 to 1.6402, while GBP/JPY advanced from 134.67 to 135.26.
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