Sterling was the only currency that outperformed the greenback today and its strength can be mostly attributed to EUR/GBP selling because data was weak. The country's public finances fell sharply, declining by 26.5b in January, a far cry from the 36.3b the previous month. Central Government NCR also saw similar deterioration with figures showing a drop of 27.8b vs. 19.3b the previous month. Public sector net borrowing fell -9.8b but this figure was better than the -14.5 number forecasted. On top of that, Governor Carney failed to provide any encouragement in his speech today. The central bank head said rates may rise faster OR slower than market expects and attributed the entire CPI overshoot to a weaker currency. A similar view was shared by BoE member Haldane, suggesting that policymakers are very comfortable with keeping monetary policy steady for the time being. Revisions to fourth quarter GDP numbers are scheduled for release tomorrow.
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