The British pound extended recent gains vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5990 level and was supported around the $1.5825 level. Leading City economists met with the Bank of England today and reported the central bank is not planning an imminent move to a Riksbank-style policy mechanism where overnight deposits would be subject to a tax in an attempt to stimulate spending. BoE policymakers are said to be frustrated with the market's reaction to BoE Governor King's statements about sterling last week that encouraged selling pressure. Data released in the U.K. today saw the CBI retail sales balance climb to +3 from -16 in August. Also, Q2 GDP data were upwardly revised to -0.6% q/q and confirmed at -5.5% y/y - the worst reading since at least 1965. Additionally, August net consumer lending grew ?699 million m/m and August mortgage approvals were up 52,000. Furthermore, the Q2 current account deficit expanded to -?11.4 billion. Cable bids are cited around the US$ 1.5720 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ?0.9105 level and was capped around the ?0.9210 level.
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