According to the minutes from their June meeting, the Bank of England is set to freeze interest rates yet again, keeping them at the record low of 0.5 per cent. It is suggested that alternative quantitative easing measures would be discussed, but the very suggestion that the BoE may print more money saw traders at ForexYard distance themselves from sterling during Wednesday’s sessions.

Following the discouraging news from London the pound suffered across the board, with significant losses against the US dollar and the struggling euro. During the London trading session online traders at ForexYard and other foreign currency markets sold the pound, pushing it down as low as $1.6050 against the greenback. The euro also took advantage of the reluctance of investors to buy pounds, climbing to a two-week high against sterling, trading at 89.53p.

During the all-important meeting of the Bank of England’s board members earlier in the month a vote whether to keep interest rates at the ultra-low rate of just half a per cent was found to be in favour of keeping rates down. Seven of the nine members agreed to an interest rate freeze for the time being, news which had an instant knock on affect for the pound.

The continuing uncertainty surrounding Greece and its failing economy has also weighed heavily on the British pound. This is due to the large amount of British money that is currently invested in Greece, its private sector and also it public holdings, money that Greece may not be able to repay.

So what’s next for sterling? Will there be renewed confidence shown towards the British pound or will we see more selling during Thursday’s sessions. If you want to trade the pound or any other major foreign currencies visit ForexYard. Online Forex broker ForexYard is a leading place to trade Forex, with great trading offers available continually. To find out more visit www.forexyard.com today.

Today the Bank of England boosted the pound at ForexYard, where traders witnessed the EUR/GBP fall over 1 per cent on the day to 87.05p, its lowest price since March 24th. There are two major reasons for the sudden drop in the EUR/GBP currency pair. Firstly, the Bank of England has raised its medium-term inflation forecasts and secondly there are fresh worries about Greece and Portugal’s ailing economies that are weighing heavy on the euro and its fortunes.

Today the Bank of England published its Quarterly Inflation Report that showed the UK’s central bank raising its medium-term inflation forecasts, with many analysts and insiders predicting an earlier than expected interest rate hike, possibly in December instead of January. Speculation that interest rates will go up has created a renewed demand for sterling, with investors seeking long positions in the pound.

Renewed fears about Greece and Portugal’s worsening debt crises have also added to the woes of the euro. Greece will almost certainly have to restructure its debt as it seems increasingly unlikely that their economy will be able to afford the agreed repayment structure following their IMF/EU bailout.

Portugal is still to have a bailout deal agreed and thanks to uncertainty in Finland it may be next week before a decision is reached. Finland, unlike other EU member states, has the right to vote on any bailout packages and currently the second political party in Finland isn’t in favour of the deal. Therefore the vote has been delayed until Wednesday of next week, a move that caused traders at ForexYard and other online brokers to avoid buying euros today, instead opting for the pound.

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The Bank of England’s quarterly inflation report shows that in the coming months it is possible that the UK Inflation Rate Could Rise Above 3%. At forex markets across the globe the British Pound fell broadly following the Bank of England’s inflation forecasts, with both the US dollar and the euro advancing against the pound.

The governor of the Bank of England, Mervyn King, predicted a sharp rise in UK inflation due to the increase in VAT and higher petrol costs, when he presented the bank’s quarterly inflation report. However, he added that inflation should then fall back below the 2% target within a short period which he predicted would then remain below the 2% target for several years.

Forex traders at foreign exchange trading companies such as HY Markets saw the pound fall by 0.8% against the US dollar, falling to $1.5579 and the pound also lost ground against its European counterpart. The euro rose 0.4% to 88.10 pence in the wake of the Bank of England’s figures.

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