LONDON: Sterling steadied on Tuesday, another round of warning signals on the economic impact of leaving the European Union not enough to extend a five-day losing streak against a broadly stronger US dollar.
The BRC retail sales survey showed spending was flat in April and new forecasts from the NIESR institute predicted the pound would slide 20 percent and growth fall by a full percentage point next year if Britain votes for to leave the EU in June.
That follows a move by money markets to price in a substantial chance of a cut in Bank of England interest rates by the end of the year, a reflection of concerns over what Brexit - or the turbulence caused by the vote alone - will do to growth.
The monthly trade gap also pointed to a vulnerability to further shocks, growing to the largest since 2008 and underlining how much the country is dependent on inflows of investment to balance the books.
"We have fallen for five days running and there's probably been some sort of a position unwind, plus the numbers this morning were fairly bearish," said Brenda Kelly, head analyst at retail brokers London Capital Group.
Sterling was just 0.1 percent higher at $1.4420 having fallen as low as $1.4375 on Monday. It gained 0.25 percent to 78.79 pence per euro.
"Sterling is still on the back foot," said Tobias Davis, head of corporate treasury sales at Western Union in London. "The Brexit debate is still front and centre of people's minds."
Comments
Comments are closed for this article.