Forex - EUR/GBP retreats from 5-month high after BOE holds steady

Published 10/07/2010, 10:34 AM
EUR/USD
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EUR/GBP
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Investing.com – The euro retreated from a 5-month high against the pound on Thursday, falling to hit a fresh daily low, after the Bank of England maintained its current course of monetary policy.

EUR/GBP retreated from 0.8804 the pair’s highest since May 7, to hit 0.8749 during European afternoon trade, shedding 0.21%.

The pair was likely to find support at 0.8686, Wednesday’s low and resistance at 0.8842, the high of April 19.

Earlier Thursday, the BOE kept its benchmark interest rate unchanged at 0.5% for the twentieth consecutive month in October, in a widely expected move. The bank also said it was to maintain the stock of 200 billion pounds of financial assets bought between March 2009 and January this year.

However the minutes of the banks meeting, due for publication in two weeks, are expected to show a three-way split between policy makers, with members variously supporting both tighter and looser policy due to uncertainty over the economic outlook.

Meanwhile, the euro was up against the U.S. dollar, with EUR/USD gaining 0.05% to hit 1.3940.

Also Thursday, the European Central Bank left its interest rate unchanged at a record low of 1.0% for the seventeenth consecutive month in October.

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