Foreign Exchange Daily Market Update 09/08/2016

Tue, August 09, 2016

Pound Falls For A Fourth Consecutive Day

The Pound fell for a fourth consecutive day, its longest losing streak since the Brexit vote, as the BOE started to expand its monetary easing program.

The BOE exceeded economists’ forecasts with its policy announcement by increasing its gilt-purchase program by 60 billion pounds to 435 billion pounds, starting Monday although; they did cut interest rates by 0.25% as expected. The central bank is boosting the money supply, which tends to weaken a currency, in order to rejuvenate the U.K.’s economy in the wake of the June 23 vote to leave the EU.

The Pound has fallen against all 16 of its major peers this year and its outlook for the rest of 2016 looks bleak, with some analysts predicting a drop to 1.26. Friday’s better than expected U.S. payrolls report will continue to punish the Pound against the Dollar because it raises the prospect of a Federal Reserve rate increase by September.

Sterling fell 0.2% to 1.3042 against the Dollar as of 4:30 p.m., the longest run of declines since May 9. It sank to a 31-year low of 1.2798 about two weeks after the U.K. referendum. The Pound dropped 0.1% to 1.1776 against the Euro, touching the weakest level since July 12.

Data to look out for today.

09:30: GBP Manufacturing Production

09:30: GBP Industrial Production

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PRESS RELEASE

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