GBP/USD Is Soft But The TWI Isn't - SocGen

GBP/USD Is Soft But The TWI Isn't - SocGen

24 February 2016, 17:05
Vasilii Apostolidi

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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