British Pound Advances after BoE's Rate Decision

By @ibtimes on

The British pound rose against majors after the BoE announced holding both interest rate and APF quantity steady at 0.50% and 200 billion pounds in February, in line with median estimates.

In fact, keeping interest rate low is giving some support to the economy after it contracted 0.5% in the fourth quarter, yet speculations are increasing that the bank will raise interest rate sooner or later to contain the inflationary pressures as the rate climbed to 3.7% in December.

On the other hand, the US dollar rebounded from three consecutive days of decline to dominate the scene today ahead of the release of initial jobless claims which is estimated to show decline to 410 thousands on February 5 from 415 thousands a week earlier.

The dollar index, whch tracks the dollar movement versus a basket of major currencies, rose to a high of 78.13 compared with the day's opening at 77.59, while it is currently trading at 78.00.

Starting with the royal pair, the pound minimized it losses pulling the pair to the upside from a low of 1.6009, where it approached strong support at 1.60 physiological level, to 1.6065 after getting a boost from 4-hour and 1-hour charts.

The day's high was recorded at 1.6066, while The trading range for today is among the key support at 1.5965 and the key resistance at 1.6300.

Concerning the euro-dollar pair, it declined on the daily basis on speculations Axel Weber, the President of the Bundesbank, will step down this year and therefore will not succeed Trichet for ECB Presidency.

The pair fell from a high of 1.3735 to reach 1.3630 while the day's low was seen at 1.3611. The trading range for today is among the key support at 1.3500 and the key resistance at 1.3890.

With regard to the dollar-yen pair, it continued its rally after having a breather yesterday to touch a high of 82.83 after dipping to a low of 82.31 to settle at 82.78.

The trading range for today is among the key support at 81.05 and the key resistance at 83.70.

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