Sterling was one of the worst performing currencies during Tuesday’s trading session, with the Sterling Currency Index (sterling against a basket of major currencies) aggressively hit and falling by 0.62%. Although the UK GfK Consumer Confidence result came in at 2, as opposed to the expected 1, the main driver of the poor performance was the November Public Sector Net Borrowing figure. The deficit was already expected to come in at £11.1 billion – a poor result when compared to the October figure of £6.7 billion – but was actually revealed to be a much higher deficit of £13.6 billion; a huge shortfall between tax receipts and spending caused sterling to drop against all of the sixteen most actively traded currencies.
Wednesday sees a number of further fundamental indicators: the Gross Domestic Product (GDP) release, expected to remain constant at 0.5%; Total Business Investment data, which is again expected to remain constant at 2.2%; Index of Services data (a small decrease from 0.7% to 0.6% is anticipated); and the Current Account data, where a decrease is forecast from -£21.5bn from -£16.7 billion. We shall see whether any positive news will be able to stop this most recent slump for the UK currency.
Sterling is struggling in the current market. Contact your trader today to see how this affects you and to plan an appropriate currency strategy.