Central bankers and currency markets have an uneasy relationship. The policymakers are aware of the microscopic scrutiny the market applies to their every remark while trying not to admit the extent to which they return the compliment.
On Wednesday Mervyn King, governor of the Bank of England, scored a direct hit with doveish observations that helped knock a full cent off sterling’s value against the dollar and resulted in the pound falling a penny against the euro.
