UK: When all the dust settles, we’ll see new lows for sterling - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the UK’s current account deficit will be bigger than Turkey’s in 2016 but that didn’t stop sterling being the strongest currency last week.

Key Quotes 

“The CFTC positioning data for last Tuesday showed speculative shorts increasing further, which of course help explain the correction. The week ahead sees house price data, CPI, PPI, unemployment, retail sales and a ‘special’ PMI release as well. If we’ve cleared enough of the shorts out, sterling could slip back Weak data would convince markets that the failure to ease in July was just a temporary delay.

On the other hand, if for some reason the data are OK, then who knows It’s bound to be fascinating. When all the dust settles, I think we’ll see new lows for sterling and a steeper curve, but on a one-week view, it’s hard to be confident of anything much in the UK.”