Further to my thoughts earlier we’re seeing some GBP weakness as we await the BoE’s latest quarterly inflation report at 10.30 GMT
Expect a downbeat growth outlook after the economy contracted in the final quarter of 2012, raising concerns about the UK sliding further into another recession.
The possibility of Governor Mervyn King reiterating his view that the UK needs a weaker currency to help exports and rebalance the economy could also have an impact obviously but he’ll be cautious after yesterday’s G7 farce over currency wars.
In any case devaluation of the Pound serves only to limit the damage given that we’re not exactly rife with export orders…..
Cable still has sellers on the rally, and EURGBP getting solid support around 0.8580 and now 0.8600 interim.
