The pound fell from a two-year high against the dollar as Bank of England policy maker Martin Weale said there has been a “sharp and unexpected” decline in inflation since the summer.
Sterling depreciated to the lowest in four weeks versus the euro as Weale told the National Institute of Economic and Social Research in London that cooling inflation means it’s less likely that the central bank’s forward guidance policy will be voided. U.K. government bonds were little changed before the Debt Management Office sells 4.5 billion pounds ($7.36 billion) of 2019 gilts tomorrow.
“We’ve had a stellar run with sterling for quite some time now,” said Neil Mellor, a currency strategist at Bank of New York Mellon in London. “It’s been on an uptrend against the dollar since mid-November. That alone provides every reason to expect some sort of curtailment in the trend.”
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