FOREX ALERTS >>
DailyFX Plus Login

gbp fundamentals

Article

British Pound Tumbles 1.5%, May Fall to November Lows as Markets Price in 75bp Cut in December
Friday, 21 November 2008 01:10:48 GMT  |  Terri Belkas, Currency Strategist
Delicious
Facebook

The British pound tumbled 1.5 percent against the greenback on Thursday, despite the smaller-than-expected decline in UK retail sales, as interest rate expectations for the Bank of England continue to plummet.

In fact, Credit Suisse overnight index swaps are now fully pricing in a 75bp reduction to the Bank Rate in December to 2.25 percent, the lowest since 1932. Meanwhile, UK retail sales fell 0.1 percent in October, keeping the annual rate low at 1.9 percent. However, the BOE has said in the past that they may focus more on private surveys, such as BRC retail sales, over government statistics as the latter tends to be extremely volatile. The latest BRC same-store retail sales index plunged 2.2 percent in October from a year earlier, suggesting that the BOE still holds a bearish view of UK consumer spending.

Related Articles: British Pound Weekly Forecast, Pound Surges Despite BoE Minutes Signaling More Rate Cuts Ahead


Check out Daily Fundamentals in its entirety for analysis and outlooks on the US dollar, euro, British pound, Japanese yen, and the commodity dollars.

More Articles

Feedback Form