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Confidence in the Pound took a sharp blow as June’s UK consumer price index fell short of forecast. Investors were not impressed to find that inflationary pressure had dipped from 2.9% to 2.6%, even though this signalled some easing in the squeeze on wages. This weaker level of inflation seems to remove some of the [...]

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As recent UK data proved almost universally disappointing, investors were prompted to take a bleaker view of the outlook of the domestic economy, although markets still continued to speculate over the possibility of an imminent return to tighter monetary policy. This created volatility as Bank of England (BoE) deputy governor Ben Broadbent made his first [...]

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June’s raft of UK PMIs all proved discouraging, pointing towards a loss of momentum within the domestic economy in the wake of the general election. This gave investors little reason to favour the Pound over its rivals, particularly as domestic productivity was also found to have contracted -0.5% in the first quarter. None of this [...]

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While the Pound was boosted by the unexpectedly split Bank of England (BoE) vote on interest rates, the impact of this surprising hawkish development ultimately proved short-lived. Comments from Governor Mark Carney prompted GBP exchange rates to slump on Tuesday, with the policymaker reiterating his view that interest rates will not rise for some time [...]

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Markets were largely caught off guard by the results of the UK snap general election, where the Conservatives lost their majority. Although Theresa May was quick to put forward her intention to form a minority government this was not enough to prevent the Pound falling to multi-week lows against its rivals. While the weakening of [...]

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Although the latest UK manufacturing and construction PMIs bettered forecasts, demonstrating resilient growth on the month, this failed to shore up the Pound for long. While signs suggest that the economy has experienced a rebound after the first quarter’s disappointing weakness focus on the general election remained dominant. With the opinion polls continuing to show [...]

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Opinion polls have provoked significant volatility for the Pound as the general election campaign enters its final days. As polling by YouGov suggested that the Conservative lead has narrowed dramatically to just three points the prospect of a hung parliament reared its head. This has put increased pressure on Sterling, with markets viewing anything less [...]

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Yesterday’s public sector borrowing figures showed government spending exceed forecasts. The deficit was already expected to widen markedly, rising to -£8 billion, but in fact overshot projections to clock in at -£9.6 billion. The fact that the government started the new fiscal year with a larger-than-expected overspend prompted a Pound-sell off, from which GBP is [...]

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US Dollar Slides on White House Scandal

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Date: May 17th, 2017.

Disappointment greeted the Bank of England’s (BoE) May policy decision, as investors had hoped to see a second hawk joining Kristin Forbes in voting for an immediate interest rate hike. Coupled with a quarterly Inflation Report that featured forecasts based on the UK achieving a smooth Brexit, this cemented market expectations that the BoE will [...]

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Confidence in the underlying economic health of the UK was boosted as a better-than-expected services PMI topped off April’s round of solid PMIs. Even so, the report highlighted the continued acceleration in domestic inflationary pressure. Coupled with a dip in mortgage approvals, this indicated that consumer confidence and finances remain under pressure, suggesting that support [...]

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