The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.3535 level and was supported around the $1.3460 level. Liquidity was light on account of the Bank holiday in the U.K. and will return to normal overnight and tomorrow. Traders do not expect any major announcements out of Bank of England when its Monetary Policy Committee's interest rate decision is announced on Thursday. The central bank is unlikely to modify policy significantly before the U.K. General Election in keeping with tradition. Many political pundits continue to speculate an election may be held on 6 May. The ongoing consensus is that the David Cameron and his Tory party will likely unseat Prime Minister Brown and his Labour party but Parliament may be hung if the Tories cannot form a majority government. Many data will be released tomorrow including Q4 BoE housing equity withdrawal, March PMI construction, and March Nationwide consumer confidence. March Halifax house prices will also be released early this week. Cable bids are cited around the US$ 1.4455 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the £0.8820 level and was capped around the £0.8860 level.
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