The British pound is on the fall across the board. The recovering US dollar can be blamed for the fall of cable, but with EUR/GBP, it seems that the weakness originates from growing speculation that the BOE will provide more ammunition to the bears.
GBP/USD made a quick dip under 1.52, but immediately moved above the line. This is an extension of the falls from the highs seen yesterday. After failing to conquer 1.54 over and over again, the pound fell.
One of the reasons was an article in the Financial Times that suggested loose policy for Mark Carney. While new forward guidance is expected only at the BOE Inflation Report on August 7th, the upcoming rate decision on August 1st could also provide a blow, perhaps a second “Carney Crash”
The euro isn’t that strong either, with EUR/USD failing to breach 1.33 over and over again. But against the pound, the euro is now trading at levels seen on March 13th, with a clear break of the previous high of 0.8710 seen on July 17th.
Comparing the euro-zone and the UK economies, it seems that the latter is stronger, despite some green shoots in the old continent. However, currency trading is never a one way street.
What’s next for GBP? For more lines, events and analysis, see the British pound forecast.
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