Source: FXTM
Conviction in the pound seems to have fallen off the way side after the most recent days of trading with the pound taking further hits as it slides down the chart. This may come as a surprise to many given the recent comments from the Bank of England about the very real possibility of a rate rise in the coming months, with the market pricing in the odds of a lift in Nov at about 81.2%. For many in the market a falling currency when rates are likely to be on the increase does not make sense, but the reality is that fundamentally there is still no plan for Britain regarding Brexit and the market is getting worried. How worried can be seen in the media, with big business asking for a plan but government struggling to deliver anything tangible. It could be perhaps that the British government is holding its cards to its chest, but the reality is that it could also be the case that no one is quite sure what to do next and it would seem the market is betting on the latter rather than the former. Uncertainty is always one of the biggest drivers in the market, because the market loves data and the ability to make sense of things, and the current UK situation continues to deliver uncertainty. So even with the BoE rate rise, it may help stem the bleeding, but it might not stop it completely in the long run. Read More
