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Pound Falls to 2-Week Low versus Euro Before Central Banks Meet - (Bloomberg)

Posted by Chris Advincula on Jul 30, 2013 6:22:00 AM

The pound fell to the weakest level against the euro in two weeks before the Bank of England, the Federal Reserve and the European Central Bank announce their next policy decisions this week.

Sterling held a two-day decline versus the dollar. The U.K. central bank reveals the results of its latest deliberations on Aug. 1, the second time under the leadership of Governor Mark Carney. Economists forecast policy makers will keep benchmark rates unchanged at 0.5 percent and will maintain their stimulus program at 375 billion pounds ($575 billion) of bond purchases, according to Bloomberg News surveys.

The U.K. currency was little changed at 86.56 pence per euro as of 9:30 a.m. London time after depreciating to 86.59, the weakest level since July 17. The pound was at $1.5329 after sliding 0.3 percent in the previous two days.

The Federal Open Market Committee, which has said it may start paring stimulus should the U.S. economy meet the Fed’s economic forecasts, starts a two-day meeting today. The European Central Bank will make its policy announcement on Aug 1.

Sterling fell 0.9 percent in the past month, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The euro added 0.5 percent and the dollar lost 1.7 percent.

Benchmark 10-year gilt yields were little changed at 2.32 percent. The price of the 1.75 percent bond maturing in September 2022 was at 95.37.

Gilts lost investors 2.8 percent this year through yesterday, according to Bloomberg World Bond Indexes. German bunds lost 1.3 percent and U.S. Treasuries declined 2.6 percent. 

 

eur.gbp.7.30 resized 600

 

gbp.7.30 resized 600

Charts: WorldWideMarkets Flash Trader

 

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