Sterling Remains in Trouble

Daily Forex Fundamentals | Written by Investica | Dec 09 08 12:09 GMT |

The weak data will reinforce fears over the UK economy which is likely to prevent more than a limited corrective recovery for Sterling. Sterling strengthened to a high above 1.50 in early Europe on Monday while the UK currency also regained the 0.86 level against the Euro, but it was unable to sustain the advance as confidence remained extremely weak. Underlying confidence in the currency still remains extremely fragile on fears over underlying capital flows out of the UK. In this environment, Sterling weakened back to record lows beyond 0.87 against the Euro and also retreated to 1.48 against the dollar before rallying again as Wall Street rallied in choppy trading. The latest BRC retail sales data recorded a 2.6% like-for-like sales decline in the year to November, maintaining the weak trend, although this figure was marginally firmer than expected. Markets will be more concerned over evidence on December sales trends, especially following the tax reductions. Sterling was below 1.48 again on Tuesday as the economic data remained weak. Industrial production fell by a further 1.7% in October to give a 5.2% year-on-year decline. Investica http://www.investica.co.uk Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.