UK data

A day loaded with UK data ended with the Sterling sharply lower trading under 1.66$ and above 0.90£ against the Euro. Economic indicators were generally in line with expectations and even slightly better with unemployment at 7.8% against an expected 8% and the claimant count rate (counting people seeking work) was 5.1% as expected. The BoE even updated upwards its growth and inflation forecast for the near term. But the comment from Governor Marvin King than he does not rule out QE expansion in the future alongside comments from BoE official that a weak pound is positive for UK exports outlined that not only BoE officials still see downside risk for the economy but that the BoE actually feels comfortable with a weaker Pound. Investors reacted to the news by hammering the currency and pushing it under its weekly lows. Although sentiment for the Sterling was negative the overall risk to haven equation was rather balanced with the Dollar ending the day flat trading around 1.5 to the Euro and rebounding to 89.8¥ from its day lows against the Japanese Yen.