The British pound is the day?s worst performing currency. It is down 150 pips against the US dollar and 200 pips against the Japanese Yen.
The Bank of England left interest rates unchanged at 5.50 percent, which was right in line with expectations. The sell-off began right at the European open and exacerbated after the interest rate decision despite the fact that the BoE does not make comments or release a statement when monetary policy is not altered. With the futures curve pricing in one and possibly even two rate hikes by the end of the year, some traders were clearly holding out for a surprise move. The only UK data released this morning was house prices, which grew less than expected in the month of May. Industrial production is due for release tomorrow. The weaker manufacturing PMI numbers suggest that overall production growth was weak in April.