The Pound Sterling earlier struck a 2-week trough after one policymaker at the Bank of England suggested that the latest batch of disappointing data from the UK convinced him of the need for more monetary policy easing. Only last week, Martin Weale had said that he needed to see more evidence of the UK’s economic weakness before considering a looser policy. Weale stopped short of suggesting an interest rate cut or direct QE, but he does not seem amenable to some measure given that the situation was worse than previously thought.
As reported at 11:04 am (BST) in London, the GBP/USD was trading at $1.3126, down 0.10%; the pair has ranged from a low of $1.307 to a peak of $1.314. Meanwhile, the EUR/GBP was trading 0.33% higher at 0.8395 Pence; the pair’s daily trading range touched a session low of 0.836 Pence and a peak of 0.843 Pence.
BoE’s August Meeting Critical
Earlier in the month, the Bank of England caught markets by surprise when they failed to lower rates from the current 0.5%. However, the latest minutes of that meeting shows that most of the Monetary Policy Committee believe that, at the August meeting, some measures need to be taken to boost the UK economy. The Pound has lost nearly 12% of its value relative to the US Dollar since June 23rd when Britain voted to withdraw from the European Union.