BOE rate-cut speculation came last week

Sterling feel to a record low against the euro on concern that the Bank of England cut its interest rates again in the beginning of next year. The greenback is soft line on the whole momentum as market participants took profits.

The BOE rate-cut speculation came last week, when the Bank of England publishes its December monetary policy meeting minutes, with a unanimous vote for a 25-bp rate cut this month. In addition, the impact of the recent banking turmoil in the financial markets and the resulting credit market tightness on the economy and inflation. The BOE and Fed probably both have are a couple of interest rate cuts in the coming years, which has a weight on their currencies.

In contrast, the European Central Bank may have its benchmark rate unchanged. The euro rose to 0.7311 against the pound sterling, tested, and a resistor, to 1.45 against the dollar.