There was a big intraday reversal in the British pound today. After hitting a high of 2.0321, the pound trended lower and hasn?t looked back. There was no major UK economic to trigger the move. Instead, the rally was attributed to a large merger or acquisition flow.
The business friendly policies have made the UK and the British pound big beneficiaries of cross border acquisitions. Just last week, the London Stock Exchange sold a 48 percent interest to the Qatar Investment Authority and Borse Dubai. UK public finances were the only piece of data released today and apparently net debt and net cash requirement hit a record high in the month of August. This indicates that the government has had a tough time raising cash and financing. The only piece of UK data due out tomorrow is second quarter total business investment; don?t expect it to be particularly market moving.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com