UK and Sterling looking vulnerable – BTMU

By FXStreet FXStreet (Guatemala) – The UK’s still elevated current account deficit leaves the pound vulnerable to less favourable external financing conditions.

Key Quotes:

“Building uncertainty related to the EU referendum and the recent pick up in financial market volatility triggered by heightened concerns over China are reinforcing downward pressure on the pound in the near-term.”

“The UK’s current account deficit has narrowed in recent quarters but still remained elevated at 3.7% of GDP in Q3 2015 compared to 5.5% of GDP in Q3 2014. The recent improvement was driven by a narrowing of the primary income deficit.”

“The direct investment income balance improved for the third consecutive quarter in Q3 reinforcing our confidence that the recent improvement in the current account is sustainable.”
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Source:: FX Street