Pound Dives To Post-Election Low

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:

GBPUSD

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…

BrexitMap

For more, see “Brexit Negotiations Begin: Here’s Your Insanely Complicated Visual Guide.”

Advertisements

Speak On It