GOOD MORNING FROM EURO FX Pound finds its feet as UK government borrowing strikes 11-year low
The pound sought to rally on Tuesday as some better-than-expected borrowing figures helped to bolster the appeal of the beleaguered currency.
The pound appeared to be picking up some steam again on Tuesday as Sterling sentiment was buoyed by the publications of the UK’s latest public sector borrowing figures. According to data published by the Office for National Statistics (ONS) the UK posted a surplus of £0.2bn in March, beating expectations that the government would have to borrow £1.1bn to balance the books last month. However, it was the annualised figures that provided the real uptick in the pound yesterday as the ONS reported that annual borrowing fell to £4.2bn during the 2017/18 financial year, coming in well below government targets. The tentative gains in the GBP/EUR exchange rate were also aided yesterday by the publication of Germany’s latest business climate index as it fell even lower than expected in April. The continued fall in business sentiment continues to be another gloomy cloud looming over Europe’s largest economy, as it follows a plethora of data suggesting the German economy is likely to experience more modest growth in 2018. Meanwhile the GBP/USD exchange rate was able to rally from a one-month low on Tuesday as the pairing threatened to fall below $1.39. This uptick in GBP/USD came despite stronger-than-expected US consumer confidence figures and solid US new homes figures, with some analysts suggesting that the US dollar’s recent bullish run may have some to an end
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