Forexpros – The euro was trading close to a four-day high against the pound on Wednesday, after the minutes of the Bank of England’s July policy meeting reinforced expectations that the bank will keep rates on hold in the near term.
EUR/GBP hit 0.8830 during European morning trade, the pair’s highest since July 14; the pair subsequently consolidated at 0.8793, gaining 0.15%.
The pair was likely to find support at 0.8755, Wednesday’s low and resistance at 0.8846, the high of July 13.
The monetary policy committee meeting minutes released earlier showed that BoE policymakers voted 7-2 to keep rates unchanged at 0.5% this month.
“Recent developments had reduced the likelihood that a tightening in policy would be warranted in the near term,” the minutes said.
The bank said that risks posed by an escalation of the euro zone’s sovereign debt crisis remained substantial and funding costs faced by major U.K. lenders remained elevated as a result.
In contrast to the June meeting, there was no mention of policy makers favoring more bond purchases this month. The minutes of the central bank’s June meeting showed that some policymakers believed the growth outlook had weakened and some believed additional monetary stimulus would be necessary.
Meanwhile, the pound inched higher against the U.S. dollar, with GBP/USD easing up 0.03% to hit 1.6129.
On Thursday, euro zone leaders were to hold an emergency summit meeting, aimed at addressing the region’s sovereign debt woes.
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