The British pound was one of the weakest major currencies on Monday, losing 1.7 percent against the Japanese yen and 1.2 percent versus the greenback.
The moves come ahead of the release of the UK’s consumer price index (CPI) reading for the month of July, which is expected to fall for the first time in six months at a rate of -0.3 percent. This may lead the annual rate of growth, which is more closely watched by the Bank of England, is forecasted to fall to 1.5 percent, the lowest since November 2004, from 1.8 percent, keeping inflation within the central bank’s acceptable range of 1 percent - 3 percent, but below their 2 percent target. If CPI falls more than projected, the British pound could pull back sharply as the markets will anticipate that the BOE will expand their quantitative easing efforts even further before year-end. On the other hand, if CPI holds strong, the currency could rally in response.
[B]Check out the Daily Fundamentals in its entirety for a look at what happened across the majors.
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