Daily FX Commentary
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Sterling support fades
Tue, Jan 13 2009, 14:45 GMT
by Tim Clayton
Sterling was unable to sustain Friday’s gains against the Euro and weakened back to lows beyond the 0.90 level. Sterling also failed to hold above 1.50 against the dollar and dipped to lows around 1.4810 in US trading.
The UK currency was subjected to a correction after gains last week while the currency was unsettled by the decline in risk appetite as underlying confidence remained very fragile. There were continuing announcements of substantial job losses which offset the impact of government plans to support the labour market.
The retail sales evidence remained weak with the BRC report recording an annual like-for-like sales decline of 3.3% for December which will reinforce consumer spending fears while there was a very weak BCC survey on economic trends. Sterling should still gain some support from the major difficulties seen in other global economies.
The UK November trade deficit for goods rose to a record GBP8.3bn from GBP7.6bn the previous month as non-EU exports declined and this will further undermine confidence in the economy with fears that the improved competitiveness will not have a major beneficial impact. Sterling pushing to lows below 1.46 against the dollar.
Published on Tue, Jan 13 2009, 15:21 GMT
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Investica Ltd
http://www.investica.co.uk | tim.clayton@investica.co.uk
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