Sterling Drop a Shock Absorber

Bank of England Deputy Governor Ben Broadbent said the pound’s fall after Britain voted to leave the European Union has acted as an important shock absorber for the economy, in a radio interview broadcast on Monday.

Sterling fell to its lowest level on record against a basket of currencies last week as investors became increasingly worried that Britain will lose its preferential trading terms with the EU – a so-called “hard Brexit”.

“Having a flexible currency is an extremely important thing, especially in an environment when your economy faces shocks that are different from your trading partners,” Broadbent told BBC

Reuters

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Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam