The Sterling got crunched on Wednesday as the Bank of England did little to clearly answer the concerns regarding the U.K. economy. Along with risk appetite taking a hit from the lackluster sentiment coming from the U.S and implications of a worldwide knock on effect if the U.S. does find itself in recession, the Sterling found itself on a slippery slope. There will be a lack of hard data from the U.K. the next two days and this will leave traders having to deal with nervous global bourses and any sentiment that Mervyn King left in the mouths of investors yesterday when he hinted the British economy remains in a difficult area and that further quantitative easing may be needed. The fact that the BoE has now started to show their hand and that it remains rather murky will be of no relief for investors who are worried about economic prospects. The million dollar question is how risk sentiment will turn with so many concerns abounding.
Written by bforex.com