Corporate foreign exchange news

Sterling under forex hedging pressure as growth figures revised

Friday, 26 February 2010 10:16:45 GMT

Published by Mark Smith-Halvorsen
Official figures which showed a flimsy 0.1 per cent growth in UK gross domestic product in the fourth quarter of 2009 may yet be revised downwards.
New government figures have shown a six per cent drop in business investment during the period and this has yet to be factored in to the preliminary growth estimates, meaning that the country may not yet be out of recession.
Such an announcement would likely put further pressure on the pound as traders look to tighten their forex risk management strategies.
However, the Guardian reports that there is still hope that consumer spending in the fourth quarter may have been strong enough to compensate for the slump in business investment, as the end of the VAT holiday on December 31st will have provided an incentive to make large purchases ahead of schedule.
New figures from GfK NOP this morning (February 26th) have shown that consumer confidence continued to rise this month as Britons celebrated the putative end of recession.
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