British Pound Sinks to 2 Month Lows

This week, the lack of meaningful UK economic data made the British pound completely vulnerable to dollar strength and weakness.

Today was a perfect example of that dynamic as the pound came under pressure from nothing other than dollar buying. Next week, the tables should turn as we expect much more important UK numbers. The data on the UK calendar includes consumer prices, the minutes from the last monetary policy meeting, the current account balance, mortgage approvals, money supply and retail sales. The Bank of England minutes will be particularly interesting because even though the BoE lowered interest rates for the first in 2 years earlier this month, the statement was not dovish. The fate of the British pound will be dependent upon how soon the BoE will cut interest rates again, if at all. Keep an eye on the voting record because a small majority in favor of the rate cut would signal a nice pause before the next move while a unanimous vote would boost expectations for another rate cut in January.