The pound is slipping early on Thursday afternoon after of Bank of England Governor Mark Carney’s held interest rates for a record 83rd month.
The Bank announced its decision at 12:00 p.m. GMT (7:00 a.m. ET), with virtually no one expecting Carney and his Monetary Policy Committee to decide anything other than to leave interest rates untouched at 0.5%, where they have stayed for more than six and a half years.
Expectations of when a rate hike will happen are getting further and further into the future, with some even predicting a cut before we get a rate rise.
As a result, the Britain’s currency shrunk prior to the announcement. Fifteen minutes before Carney’s announcement, the pound was down by 0.1% against the US dollar, while the euro was up 0.6% on the pound.
Since no change in rates was announced, it has continued to slip. Ten minutes after the announcement at 12:10 p.m. GMT (7:10 a.m. ET) the euro was trading 0.77% up against the pound at 0.7665, and is down 0.22% against the dollar, a fall of around 0.1% since this morning. Things could move even more when Carney steps up to speak at 12:30 p.m. (7:30 a.m. ET).
Here’s how things looked like a few minutes ago in Euro/Pound trade:
Elsewhere in the markets, European equities are rallying after a couple of days in the red, thanks largely to a day of positive trade in Asia, and an overnight increase in the price of oil.
That increase has pretty much evaporated today, with the two major oil benchmarks on opposite sides of flat. Brent is down around 0.5% to $34.85, while West Texas Intermediate is up by 0.57% to $32.47 per barrel.
Asia’s small rally, which pushed all three of China’s major indexes up more than 1%, and sent the ASX200 in Australia up by 2%, has helped European markets, which are all in the green on Thursday afternoon. The FTSE100 is leading gains, up as much as 1.5% during morning trading, led higher by strong performances from Britain’s mining companies.
Elsewhere, gains in Europe are around 0.5-1%, but the Bank of England decision appears to have left equity markets unmoved.
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