Forex Pros – The pound recovered ground against the euro on Thursday, as expectations that U.K. interest rates will rise in the near term were boosted following remarks by a senior Bank of England policymaker.
EUR/GBP hit 0.8405 during European morning trade, the daily low; the pair subsequently consolidated at 0.8407, shedding 0.25%.
The pair was likely to find support at 0.8359, Wednesday’s low and resistance at 0.8476, the high of February 11.
BOE monetary policy committee member, Andrew Sentence, said earlier that the bank should raise interest rates to boost the pound and help it to contain inflation pressures.
On Wednesday, in its quarterly inflation report, the central bank raised its forecasts for inflation for 2011 but said economic growth would be slower, weighed by higher commodity prices and government budget cuts.
The report highlighted the central bank’s dilemma of balancing higher inflation and weak economic growth.
The pound was also higher against the U.S. dollar, with GBP/USD climbing 0.17% to hit 1.6123.
Later in the day, the U.S. was to publish official data on consumer price inflation and initial jobless claims.
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