August 6, 2020 EUR / GBP Analysis

August 6, 2020 EUR / GBP Analysis

• EUR / GBP Sold on Thursday as part of the British pound. • Compelling BoE monetary policy announcement led to moderate increase for pound. • The offer surrounding the shared currency can help limit deeper losses. The British pound has recovered slightly after the BoE announcement and pushed the EUR / GBP level to a trading low around 0.9025. As expected, the Bank of England largely dropped interest rates at the all-time low of 0.1%, and the bond buying program remained the same at £ 745 billion. Following this, in its policy statement, the UK central bank offered some optimistic views and a modest increase for the pound sterling. BoE said the economic crisis was less severe than originally thought, and also raised the projection of the current year's economic growth. BoE reiterated that its risks remain downside and ready to regulate policy as needed. BoE expects inflation to remain low but return to its 2% target in two years. It is not mentioned that negative interest rates, which seem to be one of the main factors behind the increase in sterling, continue to progress. On the other hand, the shared currency continued to be supported by the widespread decline surrounding the US dollar. This could help contain deeper losses for the EUR / GBP, at least for now.