Sterling briefly nudged higher on Wednesday after minutes from the Bank of England’s latest policy meeting suggested that more policymakers were edging towards voting for a first interest rate hike since before the financial crisis. Though all nine monetary policy committee members voted to keep rates at their record lows, for a number of them the risk of inflation rising above the BoE’s 2 per cent target was rising. The “very material factor” of Greece’s debt stand-off influenced their vote to keep rates on hold. Some had been betting that one or more MPC members would vote in favour of an immediate rate rise.
Greece passed a second bundle of policy measures demanded by the country’s European creditors as Prime Minister Alexis Tsipras urged lawmakers to stop the country being forced out of the euro. Tsipras won the support of at least 151 lawmakers in a televised, public vote in the 300-seat parliament in Athens for a bill that will simplify court decisions and transpose European rules on failing banks. Echoing the rhetoric of the predecessors he once demonized, Tsipras said he’ll implement the creditors’ program even though he thinks the policies being imposed are wrong. He insisted he’ll do everything he can to improve the final deal.
The dollar crawled off one-week lows against the yen this morning. The dollar was flat on the day against the yen at 123.98 yen, holding above a one-week low of 123.57 yen touched in the previous session. US data yesterday showed new home resales rose to a 8-1/2 year high, bolstering bets that the Federal Reserve is on track to hike interest rates later this year. The prospect of higher rates enhanced the dollar’s appeal, and propelled it to session highs.