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Investors lowered their expectations of a rate cut in January.
Expectations of a rate increase have recently fallen.
Expectations of a rate cut have been lowered in recent weeks.
The Reserve Bank appears in no hurry to ease interest rates despite rising expectations of a rate cut before Christmas.
It is nearly impossible to determine the motivations of central bankers, but many analysts saw the retrenchment as an attempt to tamp down expectations of a rate increase.
Expectations of a rate increase have faded in recent weeks because of rising concern about the economic fallout of the global crisis in the credit markets.
Similar(33)
The immediate reaction would probably be to sell sterling, especially as many traders are quite long sterling (the pound had been moving up earlier in 2014 on the expectation of a rate rise).
There had been little expectation of a rate hike then.
The euro extended its rally ahead of a European inflation report today that is expected to reinforce expectations of an interest rate increase.
Expectations of a Fed rate cut have also diminished, Mr. Levkovich said.
The weak pound is providing support following renewed expectations of a UK rate cut next month.
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