The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.9655 level and was supported around the $1.9550 level. The pair continues to orbit the $1.9625 level, representing the 50% retracement of the move from $1.8090 to $2.1160. Bank of England’s quarterly inflation report was released today and it assumes an additional 75bps of monetary easing between now and Q4. BoE also reported risks to economic growth are weighted to the downside and indicated inflation could spike higher temporarily before receding. BoE Governor King said tighter credit conditions for households and businesses will bear down on demand both in the United Kingdom and abroad and added second, rising energy, food and import prices will push up on inflation. Data released in the U.K. today saw RICS report that January house prices reached their lowest level in more than fifteen years. Also, the January claimant count fell by 10,800 after falling an upwardly revised 8,700 in December and wage growth remained benign, falling to +3.8% from +4.0% in November. BoE MPC member Tucker said banks’ earnings over the next few weeks will be critical in solving the credit crisis. Cable bids are cited around the US$ 1.9260 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.7415 level and was capped around the ₤0.7450 level.