Forex UK News – Bank of England minutes weigh on Sterling

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The central bank of England has published today the minutes of the previous meeting; the outcome abides by the expectation, of two votes in favor of a rate hike. The markets have negatively absorbed the diminishing of the hawks in the BoE(throughout 2011 three members of the BoE have voted for a raise in the rates); while at the same time the inflation in UK is twice higher than the Bank’s target, turning consumers, producers and investors into deep skepticism. The surging inflation combined with the slow growth and the policy of no action from the Bank of England (they blame the price pressures to the VAT raise) so far in 2011 threats severely the recovery process. Upon the release of the minutes the British pound has lost some 77 pips within minutes against its US counterpart to touch a session trough of 1.6137, strong support is on the 1.6075 area towards the four week low of the pair. Sterling is currently trading against the US Dollar at 1.6146. The EURGBP has climbed to a ten days peak of 0.8920, the cross pair is eyeing the fifteen month high of 0.9041 of May 2011. The Euro is now trading against the Sterling at 0.8917.