Forex Pros – pros – The euro was steady against pound on Thursday, ahead of interest rate decisions by both the European Central Bank and the Bank of England later in the day.
EUR/GBP pulled away from 0.8928, the pair’s lowest since June 28, to hit 0.8049 during European late morning trade, dipping 0.01%.
The pair was likely to find support at 0.8858, the low of June 27 and resistance at 0.9018, Wednesday’s high.
The ECB was expected to hike its key lending rate to 1.5% from 1.25% at its policy setting meeting later Thursday, after the bank’s head Jean-Claude Trichet said last week that the bank was in “strong vigilance mode.”
But the single currency remained vulnerable on the chance that the ECB would not flag further rate hikes this year at its post-policy meeting press conference.
Meanwhile, concerns over the euro zone’s sovereign debt crisis persisted after ratings agency Moody’s downgraded Portugal’s credit rating to junk status.
Elsewhere, the euro was lower against the U.S. dollar, with EUR/USD sliding 0.14% to hit 1.4298.
The BoE looked set to leave its benchmark interest rate unchanged at 0.5% amid concerns over the uneven nature of the U.K.’s economic recovery.
The minutes of the central bank’s June policy meeting showed that some monetary policy committee members believed the growth outlook had weakened and some believed more monetary stimulus may be necessary.
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