It was not a good week for sterling, as the currency dropped to a three month low against the euro and fell to its lowest level against the dollar since April 2015.
However, yesterday we may have seen the beginning of the end of sterling’s slump, with a number of key influential indicator data released. Sterling has managed to claw back some of the strength it lost this week, with the help of UK Current Account data figures that were better than expected at -17.460 billion, compared to a consensus of -21.500 billion and last month’s reading of -17.490 billion. Total Business Investment data remained constant at 2.2%, which also helped sterling to strengthen across the board, despite UK Gross Domestic Product (GDP) data falling 0.1% short compared to the expected 0.5%.
BBA Mortgage Approvals data will be released on the morning of Christmas Eve; the only piece of data due to be released from the UK. This is considered a leading indicator of the strength of the UK housing market and the consensus is expected at 46.200 thousand, compared to the previous result of 45.437 thousand, which means we could see sterling strengthen further, although we expect only small movement if this is the case.
Sterling is still struggling. Contact your trader today to see how this affects you and to plan your currency strategy.