Forex - Pound Rebounds But Still Near 7-month Lows Against Euro

LONDON (AFP) - The pound bounced back in afternoon trade but remained near seven-month lows against the euro after an extremely dovish set of minutes from the last meeting of the Bank of England's rate-setting body cemented expectations that the UK's cost of borrowing is at, or near, its peak.
The Monetary Policy Committee, which unanimously decided to keep its key repo rate unchanged at 4.75 percent at its last meeting on Sept 9, noted that third-quarter GDP could be lower than anticipated, and that house price inflation may ease by more than forecast, with the consequent downward effects on consumption.
"The market is quite rightfully thinking that the market risk is that there will be no further rate hikes, capping sterling on the upside," said Adrian Foster, chief FX strategist at Dresdner Kleinwort Wasserstein.
At one stage before recovering slightly, the euro was trading at 0.6866 stg, its highest level since Feb 10, while the pound fell below the 1.80 usd mark to a low of 1.7889 usd.