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Sterling skids to $1.30 as inflation, Brexit cast doubt on August rate rise


Wednesday, 18 July 2018 23:54 WIB

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Sterling tumbled to 10-month lows against the dollar on Wednesday after data showed British inflation failed to rise as expected and Brexit-linked political turmoil pummelled the currency towards the $1.30 mark.

Annual consumer price inflation held steady in June at 2.4 percent - the bottom end of forecasts in a Reuters poll of economists who had expected to see the first increase this year, to 2.6 percent.

Market expectations for a 25 basis point August interest rate rise by the Bank of England fell back to 72 percent from close to 80 percent earlier this week.

The pound was already down before the inflation data on a rallying dollar and worries about British Prime Minister Theresa May’s ability to push through her Brexit plans after she only narrowly won a crucial parliamentary vote on Tuesday.

May threatened rebel lawmakers in her Conservative Party with a general election this summer if they defeated her Brexit plans on customs.

Trading at $1.3080 before the inflation numbers, sterling fell further to a low of $1.3010, its weakest since Sept. 5. Against the euro the pound dropped 0.4 percent to 89.32 pence.

Source : Reuters


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