An earlier post drew attention to a statistical tendency for the exchange rate to weaken when Bank of England Governor Mervyn King gives a speech or appears at an Inflation Report press conference. In 12 such instances between August 2007 and November 2008, the average daily fall in the sterling effective index was 0.5%.

Mr. King gave a dinner speech on 20 January and presented at yesterday’s press conference. The sterling index dropped by 1.6% on 21 January and 1.5% yesterday. Intriguingly, it also fell on the preceding days – by 2.7% on 20 January and 1.3% on Tuesday. Are markets beginning to anticipate the “King effect”?