Cable Snaps As Bank Of England Welcomes The Currency Wars!

• Cable Snaps As Bank Of England Welcomes The Currency Wars! 
  by Tyler Durden, www.zerohedge.com
  Following yesterday’s G-7 announcement which sent the USDJPY soaring, and its embarrassing “misinterpretation” clarification which undid the entire spike, by an anonymous source in the US who said the statement was in fact meant to state that the Yen was dropping too fast and was to discourage “currency wars”, it was only a matter of time before another G-7 country stepped into the fray to provide a mis–misinterpretation of the original G-7 announcement. That someone was the BoE’s outgoing head Mervyn King who at 5:30 am eastern delivered his inflation reporting which he said that “it’s very important to allow exchange rates to move,” adding that “when countries take measures to use monetary stimulus to support growth in their economy, then there will be exchange rate consequences, and they should be allowed to flow through.” Finally, King added that the BOE will look through CPI and relentless UK inflation to support the recovery, implicitly even if it means incurring more inflation.
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  In other words, the BOE is firmly on the side of Japan, because the BOE itself it itself planning on engaging in precisely the kind of currency warfare that Japan is in the spotlight for, or King merely validated what we said in November when we advised against the lunacy of holding GBPUSD now that a Goldmanite is set to be head of the central bank. Sure enough, the cable snapped and plunged over 100 pips in the aftermath of King’s unofficial entry into the currency wars, and is now some 600 pips lower than when Carney was officially announced as the next head of the BOE.
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