Daily Afternoon Report 08/10/2015
The pound trimmed gains against the U.S. dollar today, after the Bank of England left its monetary policy unchanged, while investors wait the minutes of the Federal Reserve’s most recent policy meeting later in the day. The BOE said it was holding the benchmark interest rate at 0.50%, in a widely expected move. The rate has been held at that level since March 2009. The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion. Minutes from the meeting showed that the Monetary Policy Committee voted 8-1 to keep rates on hold, with Ian McCafferty voting in favor of a hike in the benchmark rate to 0.75%. All nine members were in favor of making no changes to the central bank’s £375 billion asset-purchase program. According to the minutes, the path interest rates will follow over the next few years will depend on economic circumstances. Most market players expect the BOE to begin slowly raising interest rates in mid-2016.
Investors were now eyeing the minutes of the Fed’s latest policy meeting, due later in the day, for further indications on the central bank’s next policy moves.
Elsewhere, the dollar has been under pressure recently amid diminished expectations for a rate hike by the Fed this year in the wake of last Friday’s unexpectedly weak U.S. jobs report for September.