Cable trading at seven week low

USDGBP, Daily              

Cable is registering just over a 1% loss on the day so far, which is the biggest mover out of the currency pairings we track. The decline mostly reflects across-the-board losses in sterling, which have pushed EURGBP into one-month territory and have come despite official data today showing a 2% y/y increase in foreign visitor spending in the UK in July. The sharp drop in pound in late June and early July following the Brexit vote has seemed to have boosted foreigners spending in the UK. The pound is down by an average of some 20% versus the G3 currencies on a year-on-year basis. Declining business investment in the face of protracted Brexit uncertainties suggests that sterling will remain biased lower into 2017, especially with the BoE having left the door wide open for further easing.

August low 1.2856, post Brexit low 1.2780 and 1.2500 all remain possible.

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