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Forex traders have resisted major investment as they wait to see if the Bank of England governor Mervyn King opts to increase the interest rate tomorrow from its current record low of 0.5 per cent, Reuters reports.
According to the markets, there is a 17 per cent chance of a cash level rise.
But Adrian Schmidt, currency strategist at Lloyds Banking Group, is not confident of an interest rate hike tomorrow.
He added: "Our forecast for the first rate hike is Q4 of this year. We don't think the MPC [Monetary Policy Committee] will be drawing any quick conclusions from December and January data."
This comes after the pound was flat against its US counterpart yesterday morning before the euro increased by 0.5 per cent versus sterling later in the day.
Posted by Greg Secker
