5 Sep 2013
EUR/GBP drops below 0.8450 after BoE
FXstreet.com (Edinburgh) -The BoE left unchanged its monetary stance on Thursday, giving some extra impulse to the sterling and dragging the EUR/GBP to test sub 0.8450 levels.
EUR/GBP trimming gains
The cross is now giving away initial gains after the BoE left both the refi rate and the asset purchase facility at 0.5% and £375 billion, respectively, matching market expectations. There is no statement following the announcement although the central bank said it will reinvest maturing Gilts. Kit Juckes, Analyst at Societe Generale noted “UK breakeven inflation can rise further, and EUR/GBP, has potential to be dragged a lot lower by the move in relative rates as the UK market prices in earlier and faster hikes from the ECB”.
EUR/GBP significant levels
At the moment the cross is losing 0.10% at 0.8443 and a breach below 0.8427 (low Sep.4) would target 0.8420 (low May.16) en route to 0.8398 (low Apr.26). On the upside, resistance levels align at 0.8487 (MA200d) followed by 0.8489 (high Sep.3) and then 0.8520 (high Sep.2).
EUR/GBP trimming gains
The cross is now giving away initial gains after the BoE left both the refi rate and the asset purchase facility at 0.5% and £375 billion, respectively, matching market expectations. There is no statement following the announcement although the central bank said it will reinvest maturing Gilts. Kit Juckes, Analyst at Societe Generale noted “UK breakeven inflation can rise further, and EUR/GBP, has potential to be dragged a lot lower by the move in relative rates as the UK market prices in earlier and faster hikes from the ECB”.
EUR/GBP significant levels
At the moment the cross is losing 0.10% at 0.8443 and a breach below 0.8427 (low Sep.4) would target 0.8420 (low May.16) en route to 0.8398 (low Apr.26). On the upside, resistance levels align at 0.8487 (MA200d) followed by 0.8489 (high Sep.3) and then 0.8520 (high Sep.2).