EUR/GBP surges to 0.89 handle post-BoE announcement

Haresh Menghani FXStreet

• BoE delivers 25-bps rate hike, the first time in 10-years.
• MPC votes 7-2 in favor of rate hike.
• British Pound slumps on Dovish inflation report.

The EUR/GBP cross extended its recovery move and surged to fresh weekly tops, around the 0.8900 handle following the highly anticipated BoE decision.

The spot caught strong bids after the Bank of England (BoE), as was widely expected, raised interest rates for the first time in 10-years and took back emergency cut from August 2016, announced following the historic Brexit vote.

• The Bank of England hikes Bank rate by 0.25% with 7 MPC members backing the move

The British Pound, however, weakened sharply as the accompanying quarterly inflation report showed that MPC foresees inflation peaking in October 2017, at just over 3%.

Meanwhile, MPC voted 7-2 in favor of raising interest rates, while the decision to leave asset purchase program at £435 billion was unanimous.

Investors now look forward to the post-meeting pressure conference, where comments by the BoE Governor Mark Carney should infuse a fresh bout of volatility across GBP crosses.

• BoE interest rate decision and Mark Carney’s speech – Live

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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