Pound Appreciates As BoE Holds Rate Steady, Maintains Hawkish Stance

(RTTNews) - The pound strengthened against its major counterparts in the European session on Thursday, as the Bank of England left its benchmark interest rate unchanged for the third consecutive meeting and reiterated that it will maintain a restrictive policy stance for an extended period of time.

The Monetary Policy Committee governed by Andrew Bailey, voted 6-3 to maintain the Bank Rate at 5.25 percent.

Three members of the committee sought a quarter-point increase at the current meeting.

These members assessed that further tightening was necessary to address the risks of more deeply embedded inflation persistence and to return inflation to target sustainably in the medium term.

The committee continued to judge that monetary policy was likely to need to be restrictive for an extended period of time.

Bank staff forecast GDP growth to be broadly flat in the fourth quarter and over coming quarters.

Consumer price inflation is forecast to remain near to its current rate around the turn of the year. The near-term inflation path is somewhat lower than projected in the November Report.

The pound advanced to a 10-day high of 1.2719 against the greenback from Wednesday's close of 1.2616. The pound may find resistance around the 1.31 level.

The pound firmed to 180.40 against the yen, from more than a 2-month low of 178.33 hit at 10:30 pm ET. The pair was worth 180.21 at Wednesday's close. The pound is seen finding resistance around the 184.00 level.

The pound moved up to 0.8590 against the euro, after falling to near a 2-week low of 0.8634 at 3:30 am ET. The pair had closed yesterday's deals at 0.8617. On the upside, 0.84 is likely seen as its next resistance level.

The pound climbed to a 3-day high of 1.1048 against the franc, from a 1-1/2-month low of 1.0956 seen at 3:30 am ET. At yesterday's close, the pair was quoted at 1.0989. It is likely to locate resistance around the 1.13 level.