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Pound Slides vs. Dollar & Yen, Driven by Brexit Fears

February 8, 2017 at 12:40 by Vladimir Vyun

A fan of 50-pound billsThe Great Britain pound slid against the US dollar and the Japanese yen today as the Brexit uncertainty continued to drive moves of the currency. Meanwhile, one of the Bank of England policy makers said that an interest rate hike may be required soon.

Kristin Forbes, an external member of the central bank’s Monetary Policy Committee, voiced an opinion that mounting inflation pressure may prompt the BoE to hike interest rates relatively soon:

 

 

If the real economy remains solid and the pickup in the nominal data continues, this could soon suggest an increase in bank rate.

Analysts speculated that a rate increase is unlikely in the immediate future, but it may occur later this year if economic growth remains stable while inflation continues to rise.

Currently, the markets’ attention is focused on the Brexit, not monetary policy, as the final voting in the House of Commons for the Brexit bill will happen later today. If the bill passes, than it will go to the House of Lords where the process of debates and voting will happen again.

GBP/USD slid from 1.2506 to 1.2483 as of 12:28 GMT today. GBP/JPY edged down from 140.53 to 140.02.

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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