Pound Sterling GBP Losses Forecast Across the Board

December 22, 2015 - Written by John Cameron

STORY LINK Pound Sterling GBP Losses Forecast Across the Board

Public Borrowing Data Sends the Pound Sterling (GBP) Lower

The Pound Sterling (currency : GBP) has been hit hard in the global currency markets during today’s trading session. The move out of Sterling-denominated assets from speculators was driven by a troubling set of domestic public sector borrowing data, published by the Office of National Statistics earlier. Drilling down into the figures, analysts noted that the UK government had borrowed some £1.3 bn more last month than it had during November 2014.

GBP-EUR Exchange Rate Drops 1% Today on UK Concerns

The total shortfall of a massive £14.2 bn between tax receipts and spending led investors to question whether the forecasts which Chancellor George Osborne used in his recent Autumn statement are overly optimistic; these nagging doubts sent the Pound Sterling lower against all of the other sixteen most-actively traded global currencies, with the major Pound pairing of GBP EUR sliding by almost 1.0% on the session. The move Southwards to an intraday low of only marginally above the 1.3500 threshold brings GBP EUR’s multi-month nadir of just above the 1.3200 level firmly into view.

US GDP Sends 'Cable' Trending Higher

Elsewhere, the US Dollar (currency : USD) has enjoyed another positive session against Sterling. The Buck continues to bask in the reflected glory of last week’s interest rate hike from the Federal Reserve. The Greenback was provided with further support from several key domestic data releases this afternoon. Better than anticipated Q3 Gross Domestic Product data, pointing to annualised US growth of 2.0% helped the Greenback’s cause and there was further positive news for the US tender when October’s House Price Index data showed a healthy month-on-month uptick of 0.5%.

GBP Exchange Rate Forecasts - More Losses Ahead?

Analysts forecast that there could be further losses to come for the GBP USD exchange rate in the short-to-medium term, if futures markets are to be believed. The latest options data suggests that there is a 50.3% likelihood that the US Federal Reserve will increase its benchmark interest rate to 0.75% in March.

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TAGS: Daily Currency Updates Pound Euro Forecasts Pound Sterling Forecasts