British Pound Drops Before Reports

The Great Britain pound continued to fall against the other major currencies today as the traders expect the negative results from the jobs and inflation reports today.
The pound is currently falling for the second day against the dollar and the euro and for the third against the yen. Market participants expect that the Bank of England Inflation Report will show that the inflation was significantly below the bank’s target rate of 2 percent in the fourth quarter of 2008. The jobless rate is also expected to grow in the report for January.
The weakness of the financial sector in the world and particularly in Britain, which has nothing else left to rely on, combined with the poor expectations for the macroeconomic statistics create a very bad background for the pound’s bulls. The further interest rate reductions are just a matter of time according the financial analysts.
GBP/USD fell from 1.4536 to 1.4407 as of 9:08 GMT today. GBP/JPY slid from 131.30 to 129.50, while EUR/GBP rose from 0.8875 to 0.9006 today.

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