EUR/GBP rallies above 0.8700 after BoE’s dovish hold

• EUR/GBP jumped to fresh weekly highs above 0.8700 following the BoE's decision.
• The BoE kept rates on hold, with 4 committee members voting for a rate cut.
• The ECB might deliver another dovish hold later on Thursday.

The Euro (EUR) is drawing support for a weaker British Pound (GBP) on Thursday, following the Bank of England’s (BoE) monetary policy decision. The pair has jumped to a fresh one-week high beyond 0.8700, from the 0.8660 area.

The Bank of England left its Repo Rate unchanged at 3.75%, as widely expected, but the voting has shown a split Monetary Policy Committee (MPC), with four policymakers calling for a rate cut, against market expectations of only two dovish dissenters.

Beyond that, the bank’s statement affirms that the risks from greater inflation persistence are becoming less pronounced, leaving the door open for further monetary easing down the road, which has sent the Pound tumbling against its main peers

In the Eurozone, the focus is on the European Central Bank’s (ECB) monetary policy decision, due later today. The ECB is widely expected to leave its benchmark interest rate unchanged at 2%. The risk for the Euro, however, is on the downside as some ECB voices are starting to flag the possibility of a rate cut, as Euro strength is threatening to trigger deflationary effects in the economy. Any hint in that direction might push the Euro lower.