The pair is falling to the lows for the day now, down 0.8% to 1.1425 as sellers set their sights on the March 2020 low at 1.1409 next. A break below that will open up the next downside leg for the pair and the pound’s woes aren’t helped by a surging US dollar in trading this week and today.
BOE policymakers were out speaking in parliament earlier and they didn’t really do much to exude confidence that they may lean towards a more aggressive rate hike next week. Bailey pretty much just tried to brush it all off by saying “don’t take today’s comments as an indication for what we may do next week”. That’s a weak hand to be playing at a time like this.
And when you throw in remarks on an economy heading towards recession and caution from Tenreyro as seen here, it is hardly convincing. All else being equal, the path of least resistance for cable looks to be a continued push lower and the technicals may support that even more once the March 2020 low gives way.