The euro and sterling fell against the dollar on Wednesday, as European rate cut speculation came back into focus following a dovish report from the Bank of England. Sterling dropped half a percent against the dollar and a quarter percent against the euro after minutes of the Bank of England's June meeting showed two Monetary Policy Committee members voted for a rate cut, including the Bank's chief economist. Rate cut speculation has moved up the agenda for markets this week after Sweden cut rates by a hefty 50 basis points on Tuesday. "The BoE minutes are the biggest mover this morning. It has opened the door for a cut in July. Also, there is clearly pressure intensifying on the ECB to cut rates," saidMitul Kotecha, head of currency research at Calyon. Traders also cited talk of a report issued by a private U.S.-based advisory group predicting that the ECB will cut rates soon. The euro was trading around the day's lows of $1.2138 at 0940 GMT, down a third of a percent from the U.S. close. Sterling was down more than half a percent against the dollar at $1.8185, one percent below two-week highs reached before the release of the minutes. The pound was down a third of a percent against the euro at 66.75 pence. The dollar also rose more than half a percent against the yen to 108.60 yen. The yen fell as speculation of an imminent revaluation of the Chinese yuan cooled after a prominent Chinese banker suggested Beijing was in no rush to revalue its currency. The yen was also hurt by data showing a shrinking Japanese trade surplus. MINUTES SHOCK Minutes of the BoE's June meeting showed Monetary Policy Committee members Marian Bell and BoE Chief Economist Charles Bean voted for a 25 basis point rate cut. The remaining seven MPC members voted to leave rates steady at 4.75 percent. As recently as May, one MPC member voted for a rate hike. The euro fell to within half a cent of nine-month lows on Tuesday after the Swedish rate cut caused some market players to conclude that a trimming of the ECB rate might not be far behind. Otmar Issing, the ECB's chief economist, was quoted by a Belgian publication on Wednesday as saying that he did not expect the current slide in the euro against the dollar to last. But Bank of Spain Governor Jaime Caruana expressed the market's pervading gloom about the euro zone economy, saying the euro zone's economic situation could be characterized by persistent weakness in the first half.