With Pound Bidders On Vacation, Sterling Drops Further

Sterling bid tone continues to remain absent from the currency markets as it seems carry traders are paring back exposure ahead of the consumer price index survey expected out tomorrow morning. Usually, the pair would likely be bid up through the announcement, however, given the global credit crunch from last week, nerves may be a little on edge.

Particularly because it also seems that expectations are for inflationary pressures to pare back in the UK economy. Yes, it?s true. In line with estimates forecasted by the Bank of England, it seems that consumer price increases may be pulling back as retail demand has turned down a bit. Suggestions of this could be seen months in advance as the market has been privy to consumer retail spending figures that have remained slightly under expectations. Now, this is not to say that consumers have all but left the arena leaving economic growth to the downside. Merely it presents room for BoE policy makers in denying the speculative public of another rate hike past six percent. Either way, tomorrow?s report will very well spell the pound?s near term future until the meeting minutes release in midweek action.