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Pound falls versus most major peers before BOE minutes

The pound declined against most of its peers before the release of the minutes of the Bank of England’s July policy meeting at which policy makers decided to keep interest rates at a record low. Sterling was little changed versus the euro and the dollar. The central bank is scheduled to release the minutes of the July 7 meeting at 9:30 a.m. in London. Should the statement highlight an increased willingness to expand quantitative easing fur¬ther, we should see a big selloff in the sterling, and the exchange rate is likely to make another run at the swing low from back in January (1.5750) as interest rates falter. Britain’s currency has dropped 6.9 percent in the past 12 months against nine developed-market peers, the second biggest decline after the dollar’s 12 percent fall.
Data 9.30: MPC Meeting Minutes.


Despite the slew of dismal data coming out of Europe, the EUR/USD held its ground throughout the overnight trade, but the rebound in the single-currency could be short lived as the heightening risk for contagion continues to bear down on market sentiment, As the EU Summit scheduled for July 21 takes centre stage, Governing council board member Ewald Nowotny said it was up to the European Central Bank to decide whether or not it will accept the Greek government  debt as collateral, and noted that the ECB should not be ‘totally’ dependant on the outlook casted by rating agencies during an interview on CNBC. At the same time, Mr Nowotny warned that a Greek default would have ‘very grave consequences’ for the region, and went on to say that the central bank has begun its exit strategy after lifting the benchmark interest rate off the record low.
No major data due today.


A bipartisan Senate proposal for a $3.7 trillion debt-cutting plan praised by President Barack Obama faces re-sistance from House Republicans, as lawmakers intensify efforts for a compromise on government spending less than two weeks before a threatened default. Obama said he will renew talks at the White House this week with congressional leaders as the Democratic led Senate and Republican House pursue divergent paths toward ending the stalemate over lifting the nation’s $14.3 trillion debt limit. The Fed has until Aug 2 to approve the debt plan when the country will no longer be able to pay its bills.
Data 15.00: Existing Home Sales.


• Canadian Dollar reached the strongest level in 11 weeks after the Bank of Canada kept its main interest rate unchanged and said borrowing costs will increase as the economy recovers.


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GBP/USD                        1.6070

GBP/EUR                        1.1340

EUR/USD                        1.4170

GBP/JPY                         126.80

GBP/AUD                        1.4960

GBP/NZD                         1.8780

GBP/ZAR                         11.12

GBP/CHF                         1.3220

GBP/CAD                        1.5250

GBP/SGD                        1.9520

GBP/THB                         47.90

GBP/HKD                        12.52

 red-down; blue-up (snap shot)

These rates are for indication purposes only.


For more information or to get the latest spot rates contact:

John Paul Georgiou

Senior Foreign Exchange Broker

+44 (0) 20 7959 6917      


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