The pound firmed against its key counterparts in the European session on Thursday, after the Bank of England kept its interest rate on hold and upgraded its growth forecasts, while signaling faster rate hikes than projected in November.
The Monetary Policy Committee voted unanimously to maintain the benchmark rate at 0.50 percent. The bank had previously raised its key rate in November 2017, which was the first hike in a decade.
Policymakers unanimously decided to maintain the quantitative easing at GBP 435 billion.
All members thought that the current policy stance remained appropriate to balance the demands of the MPC's remit, the minutes showed.
In the Inflation Report, the bank said GDP growth was projected to remain around its current pace, a slightly stronger near-term outlook than in November, underpinned by strengthening global growth.
"It will be likely to be necessary to raise interest rates to a limited degree in a gradual process but somewhat earlier and to a somewhat greater extent that what we had thought in November," Carney said in a press conference.
"Demand growth is expected to exceed the diminished supply growth," he added.
In other economic news, data from the Royal Institution of Chartered Surveyors showed that UK house price balance remained stable in January and buyer enquiries continued to fall.
The house price balance remained at 8 percent in January, while it was forecast to drop to 5 percent.
The pound rose against its major rivals in the Asian session, with the exception of the euro.
The pound added 1.2 percent to a 3-day high of 1.4008 against the greenback, up from a 2-day low of 1.3846 set at 4:00 am ET. The pair closed Wednesday's trading at 1.3878. The pound is poised to challenge resistance around the 1.43 level.
The pound strengthened to 1.3236 against the Swiss franc, a weekly high and marks a 1.2 percent rise from a low of 1.3074 hit at 5:15 pm ET. The pair was worth 1.3101 when it closed Wednesday's deals. Next key resistance for the pound is likely seen around the 1.34 area.
Erasing its early losses, the pound appreciated to a 3-day high of 153.61 versus the yen. The currency thus gained 1.6 percent from near a 4-week low of 151.21 seen on Tuesday, when the yen rallied following global stock sell-off. Further uptrend for the pound is likely to see it testing resistance around the 155.00 mark.
Data from the Ministry of Finance showed that Japan logged a current account surplus of 797.2 billion yen in December.
That was shy of expectations for a surplus of 1,056.9 billion yen following the 1,347.3 billion yen surplus in November.
The pound spiked up to a weekly high of 0.8733 against the European currency, up by 2 percent near a 4-week low of 0.8911 recorded early this week. The euro-pound pair ended Wednesday's session at 0.8836. If the pound extends rise, 0.86 is seen as its next resistance level.
Figures from Destatis showed that Germany's exports and imports increased unexpectedly in December.
Exports rose 0.3 percent month-on-month in December, slower than the 4.1 percent increase seen in November. However, shipments were expected to fall 1 percent.
by RTT Staff Writer
For comments and feedback: email@example.com