Summary The Bank of England, as expected, kept its main interest rate at a record-low 0.50 percent.
NEW YORK (AFP) - The British pound fell Thursday as the Bank of England kept interest rates low, while the dollar fell against the euro ahead of the July US jobs report.
The Bank of England, as expected, kept its main interest rate at a record-low 0.50 percent. The BoE raised its forecast for British economic growth this year to 2.8 percent from a previous estimate of 2.5 percent.
However, the central bank also said the near-term outlook for inflation is "muted," according to BoE minutes.
"The falls in energy prices of the past few months will continue to bear down on inflation at least until the middle of next year," the minutes said.
The weak inflation outlook means traders pushed back their time frame for the first British rate hike "into later 2015," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
The BoE s statement "failed to impress," said Kathy Lien, analyst at BK Asset Management.
"Investors were looking for a clear sign that the central bank is moving closer to raising interest rates but instead what they got were changes in their economic forecasts that suggests the central bank is still in no rush to tighten," Lien said.
The dollar retreated a bit against the euro and the yen ahead of Friday s jobs report. Analysts expect the US economy added 229,000 jobs in July.
The jobs report is the "headline event of the week" given the importance of the labor picture to the US Federal Reserve s monetary policy, said Christopher Vecchio, currency analyst at DailyFX.
"Irrespective of the outcome, a bigger than normal burst of volatility seems guaranteed around the US labor market data," Vecchio said.
2100 GMT Thursday Wednesday
EUR/USD 1.0923 1.0904
EUR/JPY 136.25 136.18
EUR/CHF 1.0717 1.0677
EUR/GBP 0.7042 0.6989
USD/JPY 124.73 124.88
USD/CHF 0.9811 0.9792
GBP/USD 1.5513 1.5603
