The British pound extended its losses against the US Dollar, as investors remain confident the BoE should be cutting rates in the near future.
Despite the lack of any significant economic news, investor sentiment remained bearish, as Experian expects the UK financial-services industry to cut 10,000 jobs over the next three years and house prices to fall 7.9% over the next two years. The British pound should be a big focus in the week ahead with PPI, employment and the Bank of England Quarterly Inflation report due for release. Oil prices are setting new records which will keep the central bank hawkish, but at the same time, they may express concern about growth. We continue to expect the British pound to underperform the US dollar as the economy continues on its downward spiral.