The British pound slumped through most of the day as the 61.8 percent fib of 1.7516-1.5257 at 1.6653 provided ample resistance for GBP/USD. UK data didn’t bode well for the pair either, as UK Nationwide home prices dropped 14.6 percent in October from a year earlier, the worst reading since records began in 1992.
Given the extremely dovish comments issued by Bank of England Monetary Policy Committee member David Blanchflower yesterday, in which he noted that UK interest rates must be lowered significantly and quickly, it is becoming increasingly likely that the BOE will cut rates aggressively on November 6 from 4.50 percent by at least 50bps. Seeing as though Credit Suisse overnight index swaps are pricing in nearly 200bps worth of cuts in the next 12 months, significant downside risks remain for the British pound in the long-term. Related Article: British Pound Dives On UK Recession News - Rebound Potential? Check out Daily Fundamentals in its entirety for analysis and outlooks on the US dollar, euro, British pound, Japanese yen, and the commodity dollars.