Mark Carney, the Gverneor of the Bank of England (BOE) has stated he will continue in his role as Governor. He will now be on a six year contrcat which will take him over the period scheduled for Brexit negotiations. This should have caused Sterling to gather some strength, but it did little to bolster the pounds position despite many reporting to the contrary.
Bank of England Interest Rate Decision
On Thursday at 13.00 we will see the BOE interest rate decision and there is the possibility of a cut due to the uncertainty surrounding the UK economy following the Brexit vote. If a cut does occur expect Sterling to have a further fall.Carney does not seemed overly concerned with the value of the pound, seeing it as an opportunity to boost exports and the need for more domestic purchasing. Personally, I think the value of foreign goods will cause the UK general public to bear the brunt of the increase in foreign merchandise. I expect a serious rise in inflation particularly in consumable goods.
A hard Brexit now seems inevitable following Fancois Hollande’s comments that no negotiations will take place until Article 50 is triggered. Theresa May has stated that it will be invoked before the end of March and negotiations could be long and arduous. It may be be Q£ before we see a significant Sterling rally.
With Trump advancing in the polls if you are a USD seller it may be time to bite the bullet. If he gains power expect the greenback to lose a lot of ground due to oddball policy ideas. Particularly curbing trade with China which could wipe trillions off both economies.
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