Investing.com - The euro pared back gains against the dollar on Thursday after the minutes of the European Central Bank’s December meeting showed that some policymakers called for deeper interest rate cuts.
EUR/USD was last at 1.0892, down from around 1.0910 ahead of the minutes.
The minutes of the ECB’s meeting on December 3 showed that some members of the governing council favored a larger cut to the deposit rate than was eventually announced.
The minutes also said the possibility was raised of expanding monthly asset purchases under the central bank’s quantitative easing program from the current level of €60 billion, or of frontloading asset purchases.
The ECB decided to lower its deposit rate by 0.1 percentage point to minus 0.3%. It also extended the end date of its asset purchases in its stimulus program by six months to at least March 2017, measures which left investors disappointed.
The single currency also pared gains against the pound, with EUR/GBP at 0.7572, off an earlier one-year high of 0.7607.
Sterling remained on the back foot after the Bank of England said Thursday that its latest inflation forecasts now look too optimistic, due in large part to steep falls in oil prices.
Recent volatility in financial markets also underlined the downside risks to global growth, the bank’s meeting minutes said.
The bank also noted that pay growth remained restrained, after figures showed that wage growth slowed to 2% last month.
The U.K. government’s plan to hold a referendum on European Union membership may be responsible for weakness in the pound so far this year, the minutes said.
The BoE left interest rates on hold at 0.5% on Thursday, where they have been since March 2009. The monetary policy committee was split eight-to-one with Ian McCafferty voting in favor of a rate hike.