The pound was trading mixed against its major rivals in European deals on Thursday, after the Bank of England maintained its interest rate at a record low, amid lingering uncertainty over the UK referendum next week on whether it should remain in the European Union.
The Monetary Policy Committee, led by Governor Mark Carney, voted 9-0 to hold the interest rate at 0.50 percent, the bank said in a statement.
Policymakers also unanimously voted to maintain the quantitative easing at GBP 375 billion.
“The outcome of the referendum continues to be the largest immediate risk facing UK financial markets, and possibly also global financial markets,” it said.
The bank cautioned that a vote to leave the EU could materially alter the outlook for output and inflation, and therefore the appropriate setting of monetary policy.
Meanwhile, European stocks fell, as declining oil prices and policy inaction by central banks in the U.S.,Japan and Switzerland added to concerns over slowing growth.
In other economic news, data from the Office for National Statistics showed that U.K. retail sales increased more than expected in May on clothing and footwear sales.
The retail sales volume advanced 0.9 percent in May from the prior month, faster than the expected increase of 0.2 percent. Nonetheless, the pace of growth slowed from 1.9 percent registered in April.
The pound was trading in a negative territory in Asian deals, amid uncertainty ahead of the U.K. referendum, scheduled on June 23, and as the Federal Reserve struck a cautious tone on its policy outlook.
It extended its decline in pre-European deals, after an Ipsos MORI/Evening Standard poll gave the Brexit camp a 6-point lead, with 53 percent wanting to leave and 47 percent willing to stay. This is first ever Leave victory in the monthly Ipsos MORI telephone survey, which is exclusive to the Evening Standard.
The pound, having fallen to a 2-month low of 0.7994 against the euro at 2:45 am ET, reversed direction and was trading around yesterday’s closing value of 0.7926. The next possible downside target for the pound may be located around the 0.78 zone.
Retreating from an early high of 1.4212 against the dollar, the pound fell to 1.4099. The pound is seen finding support around the 1.39 region. The pair was worth 1.4203 when it closed Wednesday’s trading.
The pound was trading higher at 1.3652 against the Swiss franc, off its early more than a 2-month low of 1.3525. On the upside, the pound may find resistance around the 1.38 mark. At yesterday’s close, the pair was valued at 1.3653.
The Swiss National Bank maintained its negative interest rate and repeated its view that the franc is still significantly overvalued.
The interest rate on sight deposits at the central bank was retained at -0.75 percent, and the target range for the three-month libor between -1.25 percent and -0.25 percent, the bank said in a statement.
The pound depreciated to more than a 3-year low of 146.38 against the Japanese yen at 2:45 am ET, and has been steady since then. The pound-yen pair finished Wednesday’s deals at 150.56.
The Bank of Japan kept its monetary stimulus unchanged as widely expected.
Governor Haruhiko Kuroda and his board members decided by an 8-1 majority vote to hold its target of raising the monetary base at an annual pace of about JPY 80 trillion.
Looking ahead, European Central Bank ‘s governing council member and Irish central bank Governor Philip Lane is expected to speak at Irish financial services industry representative body event in Dublin at 7:45 am ET.
In the New York session, U.S. CPI data for May, U.S. weekly jobless claims for the week ended June 11, U.S. current account data for the first quarter, the U.S. NAHB housing market index for June and U.S. Philadelphia Fed manufacturing index for June are set to be published.
At 4:00 pm ET, Bank of England Governor Mark Carney will deliver a speech at the Mansion House Bankers’ Dinner in London.
The material has been provided by InstaForex Company – www.instaforex.com