The Guardian view on Andrew Bailey's aggression: whatever traders think is true becomes fact | Editorial

Before Andrew Bailey's comments, the pound was thriving, nearly reaching pre-Brexit levels, but speculation about interest rate cuts led to a sharp decline.

The interest rate narrative shifted post-Bailey's interview, impacting traders' perceptions and leading to a significant drop in the pound's value.

Despite a trade deficit, the pound strengthened, showing how market perceptions can alter currency strength, often independent of underlying economic indicators.

Historically, the balance of payments and currency crises shaped public confidence, illustrating that short-term currency prices often react to traders’ beliefs.

Read at www.theguardian.com