Bank of England, European Central Bank hold rates steady.

March 6, 2008 - Forex Economic News

The Bank of England announced the decision to keep its interest rate at 5.25 percent today. The BOE had reduced its interest rate on February 7th by .25 percent citing a slowdown in economic growth, financial market turmoil, tightening credit lending and slower consumer spending. Meanwhile, the European Central Bank also left its interest rate unchanged at 4.0 percent today. The ECB has kept its interest rate steady after a raise of .25 percent in June of 2007. The ECB Governing Council also left the deposit rate steady at 3 percent and the marginal lending rate unchanged at 5 percent today.

The Euro hit a new record high against the dollar at 1.5378 after the rate decision and comments from the ECB's President Jean-Claude Trichet that inflationary pressures persisted and the ECB was not ready to cut interest rates. The Pound also reacted positively from the Bank of England's holding of their rate. The GBP/USD pair surged above the 2.0000 mark for the first time since January and pushed all the way to up to 2.0096 before settling around 2.0080 later in the day.

Tags: Euro, Pound Sterling, Bank of England, European Central Bank, BoE, ECB, gbp/usd, eur/usd, interest rates

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