Pound Sterling loses further ground against both Euro & US Dollar

Pound Sterling has lost further ground against both The Euro & US Dollar this morning after it has emerged that UK GDP figures in November undershot expectations of 0.2% growth, only growing by a meagre o.1%. This has now increased the prospect of stagflation being a real concern in the economy as we now see the effects of budget uncertainty and the poorer weather taking effect on any hopes of growth. After experiencing some breathing space off the back of yesterday’s surprising Inflation release, GBP has now lost more than half of its gains in particular against The Euro. It is also expected that The UK economy flatlines throughout the next quarter as Storm Bert which has battered the whole of The UK through January is expected to have disrupted consumer activity even more.

Moving into this afternoon, we have US Retail Sales for December which looks like may show a slight drop from previous figures by 0.1%. We had positive Inflation news out of The US yesterday and so it could potentially reflect in positive retail sales as well, which if that was to be the case would put further pressure on Sterling.

Keeping with Retail Sales, we have the UK’s December release which according to forecasts is set to surprise many of us and actually show an uptick of 0.2% for December month-on-month figures. This would of course again provide Sterling with some much-needed relief, but it should be noted that with inflation having dropped lower than expected, we could well see this reflected in poor retail sales and therefore again potentially bring further pain to Sterling to round off what has, by large been a week to forget.

GBP/EUR 1.1843 GBP/USD 1.2192 GBP/AED 4.4813
GBP/AUD 1.9618 GBP/CHF 1.1102 GBP/CAD 1.7525
GBP/NZD 2.1756 EUR/USD 1.0284 GBP/ZAR 22.9800

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