(RTTNews) - During early European deals on Wednesday, the pound made a sharp spike higher against its major counterparts after the release of the minutes of the Bank of England's August meeting showed at 4:30 am ET that eight members voted to retain the interest rate at a record low of 0.5%, while Andrew Sentance sought a 25 basis point hike.
The pound thus climbed from near a 4-week low against the yen and the franc and a 3-week low against the dollar.
The meeting was held on August 4 and 5.
"For one member, the balance of risks was such that it was appropriate to start to withdraw some of the exceptional monetary stimulus provided by the easing in policy in late 2008 and 2009," the minutes showed.
Most members thought that the current level of Bank rate and stock of asset purchases financed by the issuance of central bank reserves remained appropriate to balance the risks to the inflation outlook in the medium term.
Policy makers unanimously decided to maintain the stock of asset purchases financed by the issuance of central bank reserves at GBP 200 billion.
Andrew Sentance had voted for a quarter point hike in the previous two meetings. The MPC had nine members in the August meeting as Martin Weale assumed office, succeeding Kate Barker.
The pound tumbled to a 3-week low of 1.5501 against the dollar and near a 4-week low of 132.49 against the yen at 2:05 am ET Wednesday. Thereafter, the pound moved sideways but it rose sharply at 4:30 am ET. At present, the pound is worth 133.50 against the yen and 1.5640 against the dollar. If the pound gains further, it may likely target 1.570 against the dollar and 134.0 against the yen.
The pound that slipped to near a 4-week low of 1.6140 against the Swiss franc at 3:55 am ET gained ground thereafter. As of now, the pound-franc pair is worth 1.6283 with 1.635 seen as the next upside target level.
The pound dropped to 0.8284 against the euro before bouncing back at 3:50 am ET Wednesday. Currently, the pound is worth 0.8240 against the euro. The next upside target level for the UK currency is seen at 0.818.
