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Big week for the pound

• Posted by Shyam Gokani in Uncategorised
• October 31, 2016
• No Comments

Sterling slipped below $1.22 on Monday as worries about the fallout from Britain’s vote to leave the European Union outweighed reports that Mark Carney will serve a full term as governor of the Bank of England.

After falling more than 6 percent against the dollar since the start of October, the pound was on track for its worst month since June, when it plunged following the June 23 vote for Brexit.

The Financial Times and the BBC reported over the weekend that Carney, who became governor in 2013, was ready to serve a full eight-year term instead of five. Politicians critical of his stance on the EU referendum had called for him to step down in 2018.

Other newspapers had said over the weekend that Carney was more likely to announce that he would leave in 2018.

Purchasing managers’ index (PMI) surveys for the manufacturing, construction and services sectors are due tomorrow, Wednesday and Thursday respectively.

Investors are also focused on Thursday’s BoE policy decision and quarterly inflation report, which will be accompanied by a news conference.

Sterling’s weakness, a rise in inflation expectations and upbeat growth data have prompted most to rule out a cut this week. Most economists expect rates to stay at 0.25 percent for the rest of the year.