Corporate foreign exchange news

Published by Jamie JemmesonThe UK is starting to witness the benefits of the largest devaluation of sterling witnessed since the collapse of the Gold Standard in the 1930s, the latest figures show.Current account deficit data from the Office for National Statistics published today (December 23rd) has defied gloomy predictions that despite the weakness of the pound, there has been little boost from rising foreign business payments and inbound tourism.Speaking to the Telegraph, David Owen, an economist at Jefferies, said that as well as helping export businesses to build sales, the weakened pound has encouraged consumers to buy British produce over imported goods."The lags between the currency falling and improved economic performance are always long. When sterling collapsed out of the Exchange Rate Mechanism [in 1992] the beneficial effect did not show up until 1994 or 1995," he explained.Looking ahead for the week, foreign exchange trading in sterling is likely to be further guided by the publication of the minutes of the December Monetary Policy Committee meeting, which are due out tomorrow.For more information on international payments, visit our Smart FX site