Sterling Tries to Hold onto Gains Caused by BoE Statement

The Great Britain pound was mixed during Friday’s trading session, but mostly held onto yesterday’s gains caused by the unexpectedly hawkish policy statement released by the Bank of England.

Yesterday’s policy statement was surprisingly hawkish, and there was even one dissenter who voted for raising interest rates immediately at the March meeting. It might seem strange for policy makers to consider monetary tightening after domestic economic data turned to worse. Yet the extremely weak currency and resulting inflation concerns may overshadow the negative impact on demand that higher rates may have, spurring the central bank into action in not-so-distant future.

GBP/USD traded basically at its opening level of 1.2358 as of 11:54 GMT today. EUR/GBP dropped from 0.8715 to 0.8687.

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