FX round-up: Cable slips on expectations for further stimulus

Cable weakened on Friday against a backdrop of a stronger Greenback and after Bank of England chief economist Andy Haldane flagged a high likelihood of further significant monetary easing when the Monetary Policy Committee next met, in August.

In the text of a revised speech released on Friday, BoE chief economist Andy Haldane said: "I would rather run the risk of taking a sledgehammer to crack a nut than taking a miniature rock hammer to tunnel my way out of prison."

"This means a material easing of monetary policy is likely to be needed, as one part of a collective policy response aimed at helping protect the economy and jobs from a downturn."

Commenting on the prospects for Britain´s economy to weaken, economists at BNP Paribas wrote: "our central forecast for the economy is a period of stagnation where it flirts with a mild contraction."

Dollar/yen on the other hand strengthened, albeit after a five-day run that to 106 yen which was the biggest depreciation since October 2014, when officials in Tokyo synchronised the announcement of the Government Investment Pension Fund's reform with a further increase of the BoJ’s asset purchase programme, analysts at Daiwa pointed out.

The weaker yen was triggered by "loud media speculation" of a major new fiscal stimulus and imminent action from the BoJ, Daiwa explained.

Euro/dollar finished the session lower by 0.79% at 1.1029 amid mixed economic data published in the single currency area.

On a positive note, headline consumer prices advanced at a 0.1% year-over-year clip in June from -0.1% in May, in line with the consensus and an initial estimate from Eurostat.

The latest reading on euro area´s trade balance was less auspicious, with the seasonally-adjusted surprlus on traded goods narrowing to €24.5bn in May from €25.4bn in April.

Acting as a backdrop, strong readings on industrial production and retail sales saw the US dollar spot index jump 0.52% to 96.58.