Gate.io: The pound is behaving like an emerging market currency

On January 15, Francesco Pesole, an analyst at ING International, said in a report that the pound’s positive reaction to Wednesday’s lower-than-expected UK inflation data highlighted that the pound is moving in tandem with borrowing costs like emerging market currencies. He said the pound usually falls after lower-than-expected inflation data reinforces expectations of a rate cut by the UK’s Central Bank in February. However, the GBPUSD rose to around 1.2220 from 1.2198 before the data, while the EURGBP fell to around 0.8435 from 0.8443 before the data. “This proves once again that the pound is currently behaving like an emerging market currency, more sensitive to long-term borrowing costs than to the short-term Central Bank outlook.”