The pound fell against most major currencies today as traders await key data out of the UK this week which is expected to disappoint following the country’s decision to quit the EU.
AT 6.06pm (GMT) the British currency was trading at US$1.2877c down from US$1.2913c in yesterday’s trading.
The news due out of the UK this week includes inflation figures, as well as employment and retail sales numbers, which many believe will fall short of expectations as the UK grapples with Brexit uncertainty.
Also weighing on the pound is expectations that the Bank of England will have to increase their stimulus program which includes cutting interest rates further to boost the economy,
“This demonstrates why, even in a murky short-term environment for the dollar, we still think there is opportunity in GBP downside,” noted Goldman Sachs currency strategists Robin Brooks and Michael Cahill.
The uncertainty in the British economy is set to continue with article 50 (The 2 year countdown for Britain to leave the EU) not expected to be triggered until autumn 2017 which means that the UK will leave the European union in 2019 at the earliest.
There is also a challenge before the British Supreme Court about the legality of Brexit with some claiming that a parliamentary vote is needed to trigger article 50 and would not be supported by a majority of parliamentary members.
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