In its third quarterly inflations report, the Bank said its outlook for the UK growth was "noticeably weaker".
The sterling dropped 3 big figures after the BOE inflation report predicted that CPI in the UK will Fall back 2% in two years time and that growth projection for first quarter of 2009 has been dropped to 0.0%. Overall the GBP/USD traded with a low of 1.8639 and a high of 1.9037 before closing shop at 1.8700 in the New York session.
The Greenback had a busy trading day with support of heavy cable sell of in Europe and gained a massive three big figures against the GPB. Crude oil shot higher in New York as oil inventories fell more than expected at -0.4m barrels. US retail sales in July were low but as expected at -0.1% and 0.4%.
Looking ahead for the data coming out of the US today, July CPI is expected at 0.4%or 5.1% Y/Y and the weekly jobless claim are seen at 432ki.
The Euro spent most the day range bound in the 1.4900 level with little impetus to break either way as large offer above 1.5000and option protections at the 1.4800 level limiting movements. Overall EUR/USD traded with a low of 1.4840and a high of 1.4980 before closing the day at 1.4930. The July CPI are expected at -0.1%and 4.1% Y/Y.