Improved UK Trade Deficit Doesn’t Help Sterling Much

Even though the UK trade deficit improved for April, sterling isn’t seeing a huge improvement against some of its major counterparts. While the UK pound is gaining ground against the euro, it is faltering against the dollar and the yen. Right now, everything is about the upcoming EU membership referendum and economic data is getting lost in the shuffle.

Right now, there is a lot of focus on economic data. The UK trade deficit ended up being more positive than expected, but it isn’t helping the sterling as much as some might expect. For now, the UK pound is gaining against the euro, mainly because there are concerns about the long-term economic health of the eurozone.
Against other currencies, sterling isn’t doing as well, even with the better data. UK pound is down against the US dollar and the Japanese yen. One of the big reasons that sterling is struggling against some of these other currencies is concern over the EU membership referendum later in the month. Those who are interested in a Brexit are polling neck and neck with those who want to stay and that is creating uncertainty that weighs on the sterling.
At 17:12 GMT GBP/USD is down to 1.4464 from the open at 1.4503. EUR/GBP are down to 0.7825 from the open at 0.7855. GBP/JPY is down to 154.10 from the open at 155.18.

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