Pound Falls to Lowest Level Since June 2010

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July 9 (Bloomberg) -- Scotiabank Chief Currency Strategist Camilla Sutton discusses the pound with Julie Hyman on Bloomberg Television's "Lunch Money." (Source: Bloomberg)

This is a reversal of what we have seen recently because the economic data in the uk by and large has been improving, at least to some degree.

How big of a setback is today's economic data and the move in the currency?

2 different questions.

The economic data isn't excuse the traders are looking for.

Weak industrial production and manufacturing data.

All of those things are very volatile month-to-month.

Those are really just the excuse and the truth of the matter is that when it has been confirmed now that policy in europe, the uk, is moving in a very different direction than it is at the fed and the u.s., and that just feeds the u.s. dollar strength environment.

Today's date it was really just the excuse that traders were looking for.

We have bernanke speaking tomorrow as well as the minutes.

Arc is pretty quiet, and then all of a sudden the day came out and people started selling sterling and it took on a life of its own.

We see sterling at new three- year lows and the momentum behind it is very strong.

It sounds like this is going to be a continued move.


When we have momentum like this it is tough to step ahead of it.

When we have policy divergence, now we have a question marks about what was looking like affirming uk economy.

The combination of those two are fairly negative.

The other thing we have is building negative sentiment against sterling.

We see the sterling short position has been building for the u.s. it has been but there is a long way to build that.

This there is that we have downside pressure.

Sterling trends lower but in the near-term the momentum is pretty strong, and the technicals are telling us that things like rsi 's are saying that we are nowhere near oversold levels.

Almost every single technical is in sell territory.

With a you are a traitor look in the next or two or looking at the year-long end.

Your year-end argot for the pound is 1.45. morgan stanley's is as low as 141. i'm just serious how you determine how low you think it is going to go.

I think the point forecast in terms of the year renders thomas one thing they know president -- one think they know for certain is that we would have the forecast wrong and we hope we get the magnitude close to write.

Academic ones don't help us very much and sentiment tends to have a really important piece overall.

In terms of 145, the ideas that they direction for sterling is over and the direction direction for other currencies like canada and australia is that we will see more weakness for the sterling that from other currencies.

By year-end we should be substantially lower than we are now.

We drop the six percent since mid-june.

We have seen a big decline but momentum is behind it.

Thank you so much.

Appreciate it.

This text has been automatically generated. It may not be 100% accurate.


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