This morning, the British Pound Came Under Pressure Once Again at Forex markets across the globe following news of a leaked report from the European Commission which slammed the UK government for their plans to reduce the UK’s public deficit.
Reuters News acquired a copy of the leaked report which criticised the UK’s Labour government regarding their plans to cut budgets in an attempt to bring the deficit in line with Europe-wide caps of three per cent. A quote from the report warns that “The fiscal strategy in the convergence programme is not sufficiently ambitious and needs to be significantly reinforced. A credible timeframe for restoring public finances to a sustainable position requires additional fiscal tightening”.
Traders at Forex markets across the globe saw the British Pound Fall Near To A Nine-Month Low against the US dollar as concerns begin to be raised regarding the state of the UK’s public finances following data indicating that the UK public sector posted a deficit of £4.3bn for January.
These figures display just how fragile the UK economy remains following the country’s escape from the clutches of a worldwide recession. In fact, these newly released figures are the first display of a January shortfall since the records began in 1993. This data has had a knock-on effect, with traders at Forex markets such as eToro seeing the pound fall near to a nine-month low against its US counterpart yesterday.
Forex traders at markets across the world were greeted by the news that the last of the world’s major economies had finally come out of recession but this revelation didn’t have the expected reaction at many of the world’s foreign exchange markets. The UK Economy Marginally Came Out Of Recession with figures showing a less-than-expected growth of just 0.1% but nevertheless these figures do show that the UK economy is on the mend.
Many savvy forex traders at sites such as HY Markets made big profits by correctly speculating that the news of the weak UK economic figures would see the value of the pound drop quite dramatically against most other currency pairs during the UK trading session. The UK’s currency did make a recovery during the US trading session but still has a way to go before recovering from today’s early setback.
Following a report released by the Office of National Statistics showing that UK inflation jumped in December, Forex Traders Saw the British Pound Strengthen On Tuesday, significantly outperforming both its US dollar and Euro counterparts. This resurgence of the Stirling currency has offered plenty of trading opportunities and lucrative positions to forex traders at companies such as AVA FX.
These reports released by the Office of National Statistics showed that UK inflation had jumped by the most in a single month since the records began in 1997, during the month on December. This could force policy makers to take the decision to raise the UK interest rates. With all of this information being released there were significant moves in across global forex markets. Following the release of the report the GBP rose to a four-month-high €1.1450 against the Euro and also made headway against the USD, reaching a $1.6456 high against the American currency.
In the last 24 hours the currency markets have seen a trend of Forex Traders Buying GBP Pairs as the UK economy released encouraging figures for December. Investors at forex trading platforms such as eToro have been quick to act upon the sudden strengthening of the Great British Pound against many other currencies at foreign exchange markets across the globe.
During Monday (4th of Jan) the GBP climbed against the USD and many other currencies, due in part to stronger than expected manufacturing figures plus higher mortgage lending approvals for December. The GBP rose to an intra-day high of $1.6242 against the USD before sliding back a little to $1.62 at around 11:30(GMT).
