Sterling saw its biggest falls on Aug. 4 since the aftermath of June's Brexit vote, while other major currencies most closely correlated with global growth rose after the Bank of England launched a series of steps to support the UK economy.
The U.S. Federal Reserve and the Bank of Japan showed the two sides of central bank action this week. The Fed's Federal Open Market Committee ended with no change to the U.S. benchmark interest rate. The lone dissenter was once again Federal Reserve Bank of Kansas City President Esther George.
A moderate stimulus package from the Bank of Japan overnight got the final trading day of the week off to a disappointing start, leaving traders to look towards the large number of earnings and data releases today to pick them up again.
Signs of a larger than previously expected fiscal stimulus plan for Japan had the yen back on the defensive today, as investors bet the Bank of Japan (BOJ) would match that with a new bout of money-printing aimed at weakening its currency.
Crude oil closed below $44.00 a barrel, suggesting there are underlying weaknesses not only in the energy sector but in the global economy. It is becoming more clear the Brexit vote was just enough to slow demand from a path of market balance to the perception of continued oversupply.
Surveys that suggested the UK economy may start to contract in quarterly terms after last month's Brexit vote dominated trade on major currency markets today, knocking almost 1% off sterling across the board.