News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Sterling Traders Unconcerned by Growing UK Deficit

Sterling Traders Unconcerned by Growing UK Deficit

Benjamin Spier, Technical Strategist

THE TAKEAWAY: UK public sector net borrowing rises 12.1 billion pounds in June -> Higher deficit neutralized by low yields -> Cable consolidates

United Kingdom public sector borrowed 12.1 billion pounds in June, exceeding expectations for 11.2 billion of net borrowing. May’s net borrowing was revised half a billion pounds higher to 16.1 billion pounds, the highest monthly borrowing amount since November 2010, according to the UK Office for National Statistics.

The UK public finances deficit for June was 3 billion pounds, lower than the expected 8.5 billion pounds of deficit. The climbing deficit raises doubts that the Chancellor of the Exchequer George Osborne will meet his yearly goal of cutting deficits by 120 billion pounds.

The statistics office said that the deficit was caused by a deterioration of public corporations. Prime Minister David Cameron has committed to eliminating structural deficit by 2017.

The usually currency negative higher deficit is moot in the face of low UK bond yields, as investors flock to UK bonds as a safe haven from the struggling Euro. Therefore, Sterling trading remained relatively unaffected by the news of higher deficit. GBPUSD has been consolidating around 1.5700 in today’s session, following yesterday’s volatile trading. Cable set a new monthly high yesterday, and resistance is likely to come in around the 1.5777 June high.

Sterling_Traders_Unconcerned_by_Growing_UK_Deficit_body_gbpusd.png, Sterling Traders Unconcerned by Growing UK Deficit

“Meet the DailyFX team in Las Vegas at the annual FXCM Traders Expo, November 2-4, 2012 at the Rio All Suite Hotel & Casino. For additional information regarding the schedule, workshops and accommodations, visit the FXCM Trading Expo website.”

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES