News Column

Pound Falls Further After BoE Inflation Report

August 13, 2014

BRUSSELS (Alliance News) - The pound fell further against the other major currencies in European deals on Wednesday as the Bank of England said that it would raise interest rates in a gradual way.

In its quarterly inflation report, the central bank said that the interest rates will be below average historical levels for some time, and the pace of increase will be gradual when it starts raising rates.

The strength in labour market quantities contrasts with continuing weakness in wage growth, the report said. Weakness in wages may be due to subdued productivity growth, and if the slack in labor market diminishes, wage growth is seen rising slowly.

The pound fell to 2-day lows of 0.7988 against the euro, 1.5188 against the franc and 171.28 against the yen, off early 1-week high of 0.7920, 6-day highs of 1.5321 and 171.28,respectively.

The pound slipped to a fresh 2-month low of 1.6723 versus the dollar, reversing from an early 6-day high of 1.6842.

The next possible downside target for the pound is seen around 1.66 against the greenback, 1.51 against the franc, 0.805 against the euro and 170.00 against the yen.

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Source: Alliance News

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