The pound is mixed this morning, remaining flat against the dollar, but consolidating against the broadly stronger euro before Bank of England releases Minutes from its June meeting. The special focus will be how new MPC member Ben Broadbent voted. Before Mr Broadbent was appointed to the Monetary Policy Committee (MPC) he had a reputation of being relatively hawkish, but at his appointment hearing in front of the Treasury Select Committee his comments were dovish as he expressed concern about demand outlook. Expect for the pound to remain under pressure as analysts anticipate a 7-2 vote to hold base Bank Rate at 0.5%.
The euro gained across the board during the overnight trade as Greek PM George Papandreou won a confidence vote that may help the government to implement additional austerity measures. Mr Papandreou will seek approval next week for 78 billion euros package of budget cuts and asset sales to avoid the county’s default. The IMF has warned EU leaders that a failure to take decisive action on the debt crisis risks triggering “large global spillovers”. On the data front, Eurozone Consumer Confidence and Industrial New Orders headline the economic calendar.
The dollar consolidated against the euro during the Asian session before the Federal Reserve announces its rate decision from their two-day policy meeting. Market participants do not expect FOMC (Federal Open Market Committee) to increase their benchmark interest rate from 0.25%, but also do not anticipate from Fed to extend its 600 billion dollars asset purchase program that expires this month.
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