Currency Exchange UK

 

Market Looking for Excuses to Sell Pound

Market Looking for Excuses to Sell Pound

According to currency analysts, the market is currently looking for excuses to sell pound. Now, they have found the ideal channel thanks to a draft of a European Commission report which calls for the UK to do more to cut its deficit.

The full report is due to be released later this week, and calls for the UK government to launch a stronger plan to cut the current deficit to within EU rules by 2015.

According to latest estimates, UK deficit will reach to 12.6% within this year alone, while EU rules state that deficit may only be 3% of GDP. 

Currently, the Labour party does have a plan in place, yet it would only cut the deficit to around 4.7% of GDP within the next four years – not enough, according to the EC.

As the draft of the report reached news desks, the pound fell against the euro, trading at around 90.90 pence.  Early trading saw the pound fall against the US dollar to $1.4977 yet later it recovered to $1.5045.

The Budget is to be released next week and many within the currency market are keeping their eyes on any news regarding this.  According to some analysts, investors are even remaining “biased to reading bad news for sterling”.