EUR/GBP at Seven Week High around 0.8520 as BOE Rejects Rate Rise

The pound fell to the lowest level in seven weeks against the euro as the Bank of England said policy makers were unanimous in rejecting higher interest rates, damping demand for Britain’s currency.

Sterling weakened versus 10 of its 16 major peers. The nine-member Monetary Policy Committee voted 9-0 to keep their quantitative-easing target at 375 billion pounds ($606 billion), according to the minutes of the Oct. 8-9 meeting published in London today. All members also agreed to hold the benchmark interest rate at a record-low 0.5 percent. Governor Mark Carney is due to speak in London tomorrow. Gilts advanced, with 10-year yields falling to an eight-week low.

“The Bank of England wants to head off the market bringing forward the expected start date of tightening,” said Paul Robson, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in London. “There isn’t a huge amount of sterling news. People may be worried about what Mark Carney might say tomorrow.”

Bloomberg

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