Bank of England minutes proved tough for sterling, which lost considerable ground to the euro

The pound depreciated for the first time in five days against the euro, losing 1.0% from its intra-day high at 1.1311 following the release of the minutes from the latest BoE policy meeting.

• Sterling lost ground after the Bank of England minutes revealed a three-way split in the decision to increase asset purchases by £25 billion at its meeting earlier this month.
  
• Among the nine Monetary Policy Committee members, one, David Miles, called for a £40 billion increase, while BoE chief economist Spencer Dale, favoured no increase at all.
  
• Analysts said the minutes left the question of whether the central bank will increase quantitative easing beyond its current £200 billion target largely unanswered. The door was open to more although such a prospect looked unlikely.
  
• Sterling also came under pressure after a survey showed that UK factory orders fell this month at their slowest pace since December, although export demand was at its strongest since April.
  
• Meanwhile, investors will be keeping an eye on any positive prospects for sterling from merger & acquisition talks as a bidding war mounts for UK confectioner Cadbury Plc.
  
• The pound may also find some support today should UK retail sales data, released at 09:30, follow market expectations and reveal a month-on-month rise.