Spreadex Market Update
Sterling gets the Bank of England ‘Super Thursday’ blues
"The pound plunged 0.7% against both the dollar and the euro. And while that means it is still above $1.31 against the former, against the latter it has sent it to a yet another new 9 month nadir."
Along the same lines the central bank unleashed a wave of downward revisions. Its 2017 GDP forecasts were cut from 1.9% to 1.7%, with 2018 from 1.7% to 1.6%. Wage growth also took a knock, and is now expected to rise just 3% in 2018 compared to the previously stated 3.5%.
Carney and co. actually argued that if the economy continued to perform in line with the central bank’s August projections then ‘monetary policy could need to be tightened by a somewhat greater extent’ than currently expected by the markets. However, that wasn’t enough to distract sterling from the raft of bad news released this afternoon, which also included a Brexit-plagued post-meeting press conference.
Instead the pound plunged 0.7% against both the dollar and the euro. And while that means it is still above $1.31 against the former, against the latter it has sent it to a yet another new 9 month nadir. This in turn allowed the FTSE some much needed breathing room, the index shooting up by more than 50 points to climb back across the 7450 mark.
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