Currency Exchange UK

 

Pound Creeps up but Shaky Ground remains

Pound Creeps up but Shaky Ground remains

Monday saw a weak start to the week for the pound as it reached eight and-a-half month lows against the US dollar.  Today in early trading it edged up 0.1 per cent to $1.5618 – but sentiment against the British currency remains nervy.

A mixture of factors is causing the pound’s shaky reaction – poor January retail sales, worries about the country’s overall debts and political uncertainty are all putting pressure on the pound.

In January, retail sales were apparently their worst in 15 years, after a stronger month in December.  Meanwhile, house prices recorded a rise.

UK trade data is also being released, which many hope will provide a clearer picture of the fourth quarter – which just scraped back into positive growth at 0.1 per cent.  While exports might be improved, UK consumption is likely to remain weak for the year.

On Friday figures showed that currency speculators are growing their net short positions – in the week to 2^nd February, they were 33,968 after having been 27,153 the previous week.

The UK’s deficit is still weighing heavy on the currency (and the economy) with some analysts likening Britain to Greece – a country which has a debt problem four times over what is allowable by EU membership rules.