Signs of Gloom Push Pound to Its Lowest Level Since April 2017
Comment of the Day

July 09 2019

Commentary by Eoin Treacy

Signs of Gloom Push Pound to Its Lowest Level Since April 2017

This article by Charlotte Ryan for Bloomberg may be of interest to subscribers. Here is a section:

The pound has been hobbled in recent weeks by concern about the U.K.’s political risk as the contest to elect the next prime minister approaches its endpoint, with front-runner Boris Johnson keeping a no-deal Brexit on the table. The pound has fallen about 2% since Prime Minister Theresa May indicated that
she would be stepping down.

“A general pound malaise has taken us through the lows from Friday,” said Jeremy Stretch, head of G-10 currency strategy at Canadian Imperial Bank of Commerce. “It looks increasingly probable that second-quarter GDP is likely to be negative for the first time since the end of 2012. With the third-quarter outlook also poor, this will add to debate about the BOE joining the global easing trend.”

Eoin Treacy's view

Until quite recently the Bank of England was talking about raising rates. That is a near impossibility today given the global growth outlook and the trajectory of policy in response to deteriorating data.

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