The British pound is under further pressure today on the back of Disappointing wage growth figures and follow on from yesterday’s CPI numbers which failed to impress the market.
Bank of England governor Mark Carney, in a speech after the CPI figures yesterday, failed to solidly confirm that a rate hike next month from the BOE was coming and seemed to be taking a wait and see approach.
The wage growth figures released today are not going to help his cause and it may just be the reason to leave rates on hold.
“He failed (Mr Carney) to commit to a rate hike next month only saying that a rate hike might be appropriate in the ‘coming months” said Kathleen Brooks at CityIndex.
“In fact, one could argue that Carney may have wanted to cool rate hike speculation just in case there are some weak data points between now and early November that could kill a rate hike, which may be why some long sterling traders bailed out on their positions as Carney started to speak,” she added.
Also pressuring the pound yesterday was speculation that the UK is prepared to leave the EU without no Brexit deal which some predict would be disastrous for UK business conditions and the economy overall, and the pound would see some serious losses.
"The UK government has argued at times that no deal is better than a bad deal, but we would expect no deal to be a very bad deal for GBP” predict analysts from HSBC
We would expect GBP-USD to trade around 1.10 under this ‘no-deal’ scenario, below the lows seen during the flash crash of October 2016." they added.