FXS: GBP falls as BoE shows 6-3 vote for unchanged rates
EUR fell against the USD today during the second part of the session. EUR/USD opened the session trading at 1.4166 and moved as high as 1.4213. It then failed to take out option barriers at around 1.4250 levels and fell as low as 1.4108. Analysts say that the pair will be sensitive to news coming from Portugal and the rising possibility that Prime Minister Socrates is forced to resign. This will put the debt crisis story back under the spotlight, the day before the EU leaders meeting tomorrow.
EUR/GBP opened the session trading at 0.8655 and rose around 70 pips to a session high at 0.8723 against the British currency, bringing back the prospects to reach a previous 4-month high of 87.60 hit last week, with the EcB likely to raise rates before the BoE.
GBP slipped today to 1.6230 against the USD in a reaction to BoE’s minutes that showed that the Monetary Policy Committee voted 6-3 again to keep rates on hold this month. The central bank said that there was a major risk inflation that could exceed 5% in the coming months but that it was too early to tell how strongly the economy was recovering after a surprise contraction at the end of last year. Traders reported that the market was positioned for more hawkish minutes. GBP opened the session at 1.6364 and lost about 135 pips.
CHF was up against the EUR today due to worries about debt problems in Portugal and unrest in North Africa. The pair opened the session trading at 1.2795 and fell as low as 1.2735. Lisbon's parliament will vote on the Portuguese government's latest austerity measures tomorrow and Prime Minister Jose Socrates has threatened to resign if the opposition fails to approve the measures. However, during the end of the session, EUR jumped against its Swiss counterpart to 1.2802 and managed to close the European session at 1.2783.
CHF was also up against the USD reaching a session high of 0.9049 per dollar from an opening level of 0.9031. Switzerland is expected to grow about 2% this year, and so far the strong currency has done little to dampen exports. The pair closed the session at 0.9044.
