The British pound came under pressure today before recovering later in the session after disappointing local data that showed consumer confidence is on the slide.
At 4.00pm (GMT) the British currency was trading at $1.2581 after trading as low as $1.2412 and up from $1.2450 in yesterday’s trading.
The bank of England reported today that consumer credit supply grew by £1.039 billion in December, well below the £1.7 billion that was predicted by analysts and shows that British consumers are holding back on their purchases.
“A lower pound may also be cutting into demand for credit as confidence wavers,” said Boris Schlossberg, managing director of FX strategy, at BK Asset Management, in a note.
Also showing a lack of consumer confidence was the latest mortgage approvals figure, which hit the market at 67.898k against expectations for a figure of 69.00k.
There may be more volatility in the pound as the trading session closes as British parliament sits for a marathon session until midnight discussing article 50, the motion for the UK to quit the European Union.
The motion is expected to be rejected by some MP’s who believe that the country is better off remaining and this is bound to leave the UK economy in limbo and create more instability in the British currency.