Research
GBP - fiscal fears
The UK is clearly not the only country facing a difficult fiscal prognosis but, since it also runs a sizeable current account deficit, there is potential for the exchange rate to be particularly sensitive to bad fundamental news. This week the pound has again demonstrated its reaction function to a jittery gilts market. Yesterday, cable plunged around 1.5% into its lows as the USD picked up a safe haven bid.


