- Posted by Shyam Gokani in Brexit, Currency, Dollar, EUR, GBP, Prime Minister, Sterling, UK, Uncategorised
- February 1, 2017
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Sterling pounced on a wounded dollar today, as it recovered from disappointing consumer credit data to cap its best January since 2011.
It was also set to be the pound’s first positive start to the year since 2012, but it was not without difficulties as it continued to struggle against the euro and the Swiss franc.
Bank of England figures showed consumers slowed the pace of borrowing in December for the first time in five months, an early sign that households might be reining in their spending as inflation rises.
There was also a slip up as separate figures showed that foreigners had been net sellers of British government bonds, known as gilts, for the first time since July.
The recent signs of weakness in UK data mean that few analysts hold out much hope that the Bank of England’s latest inflation report and readout on the economy on Thursday will offer much encouragement to sterling.
HSBC advised its clients on Monday to sell the pound, with a target of $1.2040 and stop loss at $1.2810.
Lawmakers in Britain’s lower house of parliament are holding a two-day debate over the triggering of formal negotiations that will take the country out of the European Union.
May’s government is seeking parliament’s approval for a law giving her the right to trigger Article 50 – the legal starting point for leaving the EU – after the Supreme Court ruled last week she could not take that decision unilaterally.
It is expected to use its majority to resist any substantial amendments to the bill, facing down opponents of a “hard Brexit” that will prioritise immigration controls over membership of Europe’s lucrative single market.