Forex Flash: Sterling thoughts as it falls - Societe Generale

Sebastien Galy, Senior FX Strategist at Societe Generale notes that the pound has rallied against both the dollar and the euro since the UK was downgraded by Moody´s and the entire Gilt yield curve is lower as well

He writes, “So much for a negative response - the downgrade was ‘discounted’. But that doesn’t mean it wasn’t important – it sent a clear message that there is virtually no room for fiscal accommodation from the Government, and all help to boost the economy will have to come from monetary policy. That can’t happen without sterling falling.”