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2 Minutes Read (Reuters) – LONDON, July 8 (Reuters) – On Thursday, the pound fell against the dollar and the euro, trading within recent ranges as analysts pointed to lower volatility levels. Sterling has been range-bound after a significant decline versus the dollar in mid-June, staying above the $1.37 mark. By 0820 GMT on Thursday, it had fallen 0.2 percent on the day to $1.3777. A stubbornly dovish Bank of England, as well as the dollar’s own head of steam in recent weeks following an unexpected hawkish turn from the Federal Reserve, have impacted on the currency. Sterling fell 0.4 percent against the euro to 85.73 pence, with analysts at ING highlighting a sustained drop in trading volatility levels. In a morning note, strategists Chris Turner, Petr Krpata, and Francesco Pesole stated, “At the margin, one could claim that the ECB strategy review should be bearish for euro-sterling – but that’s a stretch.” On Thursday, the European Central Bank will release the results of an 18-month strategy review, which will include a redefinition of an inflation target. The Bank of England’s (BoE) quarterly assessment of credit conditions, which will provide insights on lending volumes and credit spreads, will be released on Thursday, according to ING. “It’s possible that it’s too early to expect lending volumes to increase. The current BoE pricing for the first 10bp hike in summer 2022 and the first full 25bp hike in March 23 appear to be reasonable – though they could be pushed back if the current downturn in optimism continues.” Sterling has gained some support this week as a result of British Prime Minister Boris Johnson’s intentions to lift COVID-19 limits on social and economic freedom in England. However, investors are wary, as the government has cautioned that when restrictions are relaxed, the number of coronavirus infections could rise. Last month, British house prices rose at their fastest pace since 1988, but fewer homes were put on the market and buyer demand expanded more slowly as a tax benefit on property purchases came to an end, according to an industry study. Ritvik Carvalho contributed reporting. Mark Heinrich did the editing./nRead More

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