GBP / CAD rebounds from four-week low, Bank of England cautious on rate cut
The GBP / CAD currency pair rebounded from Thursday's 4-week low after the BoE said it needed more evidence that inflation would return to target levels before leaving interest rates unchanged.。
The GBP / CAD currency pair rebounded from Thursday's 4-week low after the BoE said it needed more evidence that inflation would return to target levels before leaving interest rates unchanged.。
The Bank of England kept its benchmark interest rate at 5 at its fourth policy meeting in February..16-year high of 25%, which is in line with market consensus。However, two members of the Monetary Policy Committee voted for a 25 basis point hike, while one member voted for a 25 basis point cut.。
The Bank of England says monetary policy must remain tight long enough to bring inflation back down to its 2% target level sustainably in the medium term。However, in its statement, the central bank removed the reference to further policy tightening and noted that inflation risks were more balanced.。
The BoE also stressed that key inflation indicators remained high despite a bigger-than-expected slowdown in services inflation and wage growth.。
Andrew Bailey, governor of the Bank of England, said at a press conference after announcing the policy decision: "We have received some good news over the past few months.。Inflation has fallen from 10% a year ago to 4% now.。Things are going in the right direction。"
"We have to be more confident that inflation will fully fall back to the 2% target level and stay there, but we haven't reached the point where we can cut rates.。The market now expects a 25 basis point rate cut with a roughly two-thirds chance by May.。A total of 110 basis points of interest rate cuts are expected this year.。
Canadian dollar traders, meanwhile, are now looking ahead to the minutes of the Bank of Canada's January policy meeting, which will be released on Monday.。
The Bank of Canada held its overnight interest rate target at 5% at its fourth consecutive meeting in January, in line with market expectations, keeping borrowing costs at a 22-year high.。
The GBP / CAD currency pair edged down 0 as of 7: 39 GMT on Feb 1.01%, quote 1.7051。On February 2, this time the GBP / CAD currency pair fell to 1.6967, the lowest level since Jan. 5 (1.6883)。
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