Sterling drops after MPC announcement

<p>The value of sterling fell after interest rates were held.</p>

The value of sterling is down today (July 4th), after it was confirmed interest rates in the UK are set to be held for another month.

Despite the arrival of the new governor of the Bank of England Mark Carney, the Monetary Policy Committee has retained interest rates at a record low for the UK of 0.5 per cent.

Interest rates have been held at this level since March 2009 and Mr Carney is yet to give any indication of his intention for their future.

Andy Scott, premier account manager at foreign currency exchange brokers HiFX, explained sterling has been sold "aggressively" and this is why it is down against its major rivals today.

Mr Scott added it was a surprise the Bank elected to release a statement regarding interest rates, rather than a brief confirmation of its decision.

He said: "For Mr Carney to have already stamped his authority after just a week in the job through issuing this forward guidance shows he means business."

Mr Carney arrived in the role this week after leaving the Bank of Canada. He replaced Sir Mervyn King as governor of the Bank of England.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.