GBP/USD on eight-month highs after Bank of England minutes

British pound advanced to fresh eight-month highs against the greenback on trading Wednesday, as the minutes from Bank of Englands most recent meeting revealed an unanimous vote regarding the future policy course of the bank and a more optimistic UK growth outlook.

GBP/USD reached a session high at 1.5969 at 9:00 GMT, the pairs highest point since January 18th, after which consolidation followed at 1.5967, gaining 0.39% for the day. Support was likely to be found at September 17th low, 1.5884, while resistance was to be encountered at January 18th high, 1.6038.

Members of the Monetary Policy Committee (MPC) at Bank of England (BoE) voted unanimously earlier in September to leave banks monetary policy unchanged, as signs of a stronger economic growth appeared in comparison with what was expected a month ago. All 9 members have voted unanimously in favor of maintaining the benchmark interest rate at the record low level of 0.50% and the scale of monetary stimulus at 375 billion GBP. This decision was BoEs second in a row, after the forward guidance policy implementation in August. The central bank has pledged that the base interest rate will remain at its current level until the rate of unemployment falls below 7% and in case that annual inflation rate tends to remain below the 2.5% level within the next at least two years as well as until low interest rates do not cause potential financial instability. All members reached an agreement that these three conditions have been met in September.

“Domestically, there were increased signs that the recovery was taking hold,” the Bank of England said in the minutes. Most recent data “presented an upside risk to the growth profile” published in the central bank’s August Inflation Report, the minutes also revealed.

In the mean time, market participants were expecting the outcome of Fed’s two-day policy meeting. The Federal Open Market Committee (FOMC) might decrease Treasury purchases to 40 billion USD and continue to buy 40 billion USD of mortgage backed securities, according to the median estimates of experts participated in a survey by Bloomberg. Federal Reserve policymakers have pledged to maintain the benchmark interest rate at levels close to zero at least as long as unemployment rate exceeds 6.5% and the inflation outlook is no more than 2.5%.

Elsewhere, the sterling was gaining against the euro, with EUR/GBP cross decreasing 0.40% on a daily basis to trade at 0.8367 at 9:33 GMT. GBP/JPY pair was advancing 0.17% to trade at 157.95 at 9:35 GMT.