The British pound appreciated vis--vis the U.S. dollar today as cable tested offers around the US$ 1.9765 level and was supported around the $1.9650 level. Most traders expect Bank of Englands Monetary Policy Committee will reduce the repo target rate by 25bps tomorrow while a minority anticipate a 50bps reduction. Data released in the U.K. today saw BRC March shop prices up 0.2% m/m and 1.1% y/y. Also, February manufacturing activity was up 0.4% m/m and 1.9% y/y but it is likely that gains in the industrial sector will not compensate for recent declines in consumer spending and house prices. Additionally, it was reported that Nationwide consumer confidence fell last month while REC reported that U.K. wage inflation fell to a 2.5 year low in March. Cable bids are cited around the US$ 1.9605 levels. The euro gained ground vis--vis the British pound as the single currency tested offers around the ₤0.8020 level and was supported around the ₤0.7965 level.
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