Currency Exchange UK

 

Sterling struggles amidst Low Confidence

Sterling struggles amidst Low Confidence

The British pound fell in early trading against the US dollar as investors headed away from so-called risky currencies.

While it is normal for investors to stick to safe positions towards the end of a year, the pound hit its one-week low against the dollar thanks to growing concerns over Britain’s fiscal policy.

Foreign exchange analysts have warned that investors are feeling less confident around the pound thanks in part to the woeful public finance figures released.  Data showed that these fell nearly twice as fast as expected in October.

Speculation has therefore also increased as to whether the UK government will need to raise its borrowing forecast for the next budget report.

Overall lack of confidence over the British economy and its currency are likely to keep the pound in risky territory for some time.  The debt situation in the UK has even been described as “horrendous” by some currency strategists.

At close to 09:00 GMT, the pound fell 0.4 per cent, reaching $1.6589.  Economists say that the fact that the UK is on shaky ground is no new news, but the level of deficit caused surprise and overall sentiment towards the pound has been flailing.