Surprise goings on in the curency markets where sterling has fallen to 1.11 against the euro. A surprise to me at least, and, it would appear, to a number of traders.
It seems the reason was some rather exuberant reporting of a statement by the Governor of the Bank of England Mervyn King, concerning reducing the rates paid on bank deposits at the Central Bank. The Bank has said this was merely a restatement of what it had said in the August Inflation Report.
There may be a slight readjustment but not much more for a bit. The markets are still worried about monetary conditions in the UK. However I still forecast a realignment against the euro as we begin to come out of recession, due to Britain's more flexible labour markets.
No comments:
Post a Comment