Wednesday FX Brief: British Pound Screeches Higher on Inflation Projection
Andrew Wilkinson submits: The pound bucked the trend on a quiet start where trading was otherwise marked by further dollar strengthening after the Bank of England revealed a poor combination of weak growth and high inflation. Meanwhile sentiment towards the euro is reaching the opposite extreme of where it stood one week ago in the run-up to the ECB meeting. Since the ECB appeared to soften its stance the single currency has weakened by seven cents versus the dollar.
British pound –
The Bank of England’s quarterly assessment for the British economy keeps the MPC boxed into a tight corner. The Bank states clearly enough that inflation is likely to rebound from its current 4% to above 5% this year and through the end of 2012 is likely to remain above the target ceiling of 2%. That’s pretty much all you need to know about today’s report. Governor King has tried his bestComplete Story »