Pound Slashes Gains on Record Deficit

The pound, which benefited yesterday from a new wave of risk appetite in European markets declined erasing most of its previous gains as today, a report indicated the largest budget deficit for the month of July since 1993, raising concerns regarding U.K.’s financial health.
Multiple reports have been posted recently indicating that Britain’s financial health is one of the most delicate among the world’s main economies, today, a report published by the Office for National Statistics indicated that the month of July broke a report for the country’s budget deficit, increasing concerns that the United Kingdom will eventually increase its debt selling, in order to stabilize its finances. Earlier today, a different report indicated a growth for retail sales in the British Isles for the second month in a row, helping investors to be more confident in the future of the pound’s country, yet at the same time, a number of economic nature problems still affect the currency’s outlook.
The situation in Great Britain is highly concerning for traders as government measures to create artificial funding may lead the country to a deeper recession, according to analysts. Quantitative measures announced by the Bank of England are one of the biggest responsible for the pound’s decline during the past months, and its hard to imagine a reverse trend under this conditions.
GBP/USD traded at 1.6469 as of 13:05 GMT after hitting 1.6565 on retail sales report. EUR/GBP traded at 0.8626 from 0.8601 in the intraday comparison.

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