Well, it’s been a rough day the pound.
Following a speech by the BOE’s Carney which threw cold water on the idea that a rate hike is any semblance of imminent, sterling has hit a post-election low:
As Bloomberg notes, Carney’s speech at the Mansion House (which was delayed from last week), “stamped out speculation over a hike that had built in the aftermath of the 5-3 MPC vote last week to keep rates on hold.”
That’s a reversal of fortune for the currency, which had risen as traders read dissenting votes as indicative of a hawkish shift amid rising inflation.
Comments out of S&P didn’t help either.
“We don’t have to wait for the end of Brexit negotiations to act on the rating of U.K., Moritz Kraemer, S&P’s chief ratings officer, said on Tuesday, before adding that he’s “not certain that March 2019 will be the end [as] there might be a transition period negotiated.”
“There are a lot of potential risks which could come together to various degrees,” Kraemer concluded, in a hilariously deadpan assessment of the truly convoluted scenario outlined in Barclays Brexit negotiations flow chart…