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6 Aug 2015
EUR/GBP spikes to highs near 0.7040 on dovish BOE
FXStreet (Mumbai) - The pound was hammered by the shared currency in the mid-European session, driving EUR/GBP to fresh session highs beyond 0.70 handle, as the Bank of England (BOE) minutes reflected a more dovish tone with MPC votes split 8-1 to leave rate unchanged.
EUR/GBP rises from 0.6983 post BOE
Currently, the EUR/GBP pair trades 0.57% higher at 0.7031, hovering close to fresh session highs printed at 0.7038. The EUR/GBP cross jumped nearly 40 pips in a knee-jerk reaction following the BOE policy announcement and its minutes release which dragged the pound lower.
The BOE MPC saw the first split since December last year, as Ian McCafferty voted for a 25 basis point rate hike at the August meeting. However, that turned out to be a disappointment as markets had been anticipating at least two members to vote for a rate hike.
The EUR/GBP cross is likely to remain lifted on broad sterling weakness as the August minutes also revealed that the central bank revised down near-term inflation outlook on the back of weak oil prices and sterling appreciation.
EUR/GBP Technical Levels
To the upside, the next resistance is located at 0.7044 (Aug 3 High) levels and above which it could extend gains 0.7100 levels. To the downside immediate support might be located at 0.6945 (July 21 Low) below that at 0.6935 (July 20 Low).
EUR/GBP rises from 0.6983 post BOE
Currently, the EUR/GBP pair trades 0.57% higher at 0.7031, hovering close to fresh session highs printed at 0.7038. The EUR/GBP cross jumped nearly 40 pips in a knee-jerk reaction following the BOE policy announcement and its minutes release which dragged the pound lower.
The BOE MPC saw the first split since December last year, as Ian McCafferty voted for a 25 basis point rate hike at the August meeting. However, that turned out to be a disappointment as markets had been anticipating at least two members to vote for a rate hike.
The EUR/GBP cross is likely to remain lifted on broad sterling weakness as the August minutes also revealed that the central bank revised down near-term inflation outlook on the back of weak oil prices and sterling appreciation.
EUR/GBP Technical Levels
To the upside, the next resistance is located at 0.7044 (Aug 3 High) levels and above which it could extend gains 0.7100 levels. To the downside immediate support might be located at 0.6945 (July 21 Low) below that at 0.6935 (July 20 Low).