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Sterling Tumbles on M4 and Fiscal Concern

Posted by cvbasheer on January 22, 2010


Sterling Tumbles on M4 and Fiscal Concern

Sterling dropped sharply in European session today after data showed that M4 broad money supply had its sharpest monthly fall on record. M4 fell by -1.1% in December and rose 6.4% yoy, much worse than expectation of 0.9%mom and 8.9% yoy rise. The undesirably low money growth showed the lack of response in the market in spite of BoE’s GBP 200b quantitative easing program. In addition, data also showed a net GBP 15.7b of public sector net borrowing in December, which is the higher on record in that month since 1993.

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