There’s no news of note on the UK referendum. UK business is coming out strongly in favour of staying in, but the outcome remains too close to call.
GBP/USD has fallen through 1.40 and while it’s easy to say that one day there will be short-covering, at the moment downward momentum is just building.
I’ve plotted GBP/USD against the trade-weighted index, just to make the simple point that while GBP/USD is at multi-year lows, the TWI is still 1 ½% above the average of the last 5 years.The fall so far is welcome to policy-makers and there is no risk at all of the Bank of England leaning against the move any time soon.
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