The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.9895 level and was supported around the $1.9715 level. The pair reached its highest level since 2 May. Bank of England Monetary Policy Committee officials testified today and reported a rate hike was discussed at the June policy-setting meeting. BoE Governor King testified that his letter to Chancellor Darling that explained why inflation is more than 1.0% above the 2.0% inflation target was not intended to be dovish. MPC members Gieve, Tucker, Barker, and Besley testified they did not opt for a rate cut now because they wanted to evaluate how medium-term inflation risks developed. Policymakers view wage developments as being a critical determinant in future policymaking. Data released in the U.K. today saw Q1 business investment decline 1.8% q/q. Cable bids are cited around the US$ 1.9360/ 1.9100 levels. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.7910 level and was capped around the ₤0.7950 level.
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