FX roundup: Sterling drifts lower as UK public-borrowing figures disappoint
Sterling cried into its Brexit beer on Wednesday and drifted lower on most major crosses, not helped by worse-than-expected UK public-borrowing figures and ensuing fears of further slips in the once-great British currency.
At about 17:14 GMT, sterling was down 0.17% to $1.2347, and down 0.6% to €1.1833. The dollar-spot index shed 0.29% to $102.990.
Britain's currency -- humbled on the global stage after a minority of the UK population voted for Brexit in June -- also fell versus the Australian and New Zealand dollars, as well as South Africa's rand and Japan's yen.
"Dour forecasts from the Office for Budget Responsibility were offset by the tabling of a 'Brexit transition phase' (yesterday) by Prime Minister (Theresa) May," said London Capital Group's Jasper Lawler.
Such a period could take the sting out of triggering Article 50 in March, the senior market analyst said.
"To some extent it's a can-kicking exercise but it would offer businesses more time for planning once the deal between the UK and EU takes shape," he added.
"We believe the uncertainty of triggering Article 50 runs the risk of testing the lows in GBPUSD early next year but expect a relief rally back above 1.30 in the second quarter."
Excluding banks, UK public-sector net borrowing was £12.6bn in November, worse than the £12.2bn forecast and up from a revised-higher £4.7bn in October, but down from a £13.2bn a year ago.
IG's Joshua Mahony said Brexit fears, coupled with a new 2016 high for UK public-borrowing, brought "heightened fears of another big move lower for sterling".
Meantime, the US dollar was mixed, posting falls against the rand and yen, but managing to limp higher on commodity-based units the aussie, loonie and kiwi.
Connor Campbell, a financial analyst at Spreadex, hoped that tomorrow's session would bring "something a bit more interesting".
"Investors may have to wait until the afternoon, however, when the final US third quarter GDP figure is released. There may also be some more (Italian bank) Monte dei Paschi drama given that the bank is rapidly running out of time to find its own escape route."
Against the euro, the dollar was down 0.46% to €0.9583.
"Prospects of higher rates in the U.S have triggered record capital outflows in Europe consequently reinforcing the EURUSD parity dream," said FXTM research analyst Lukman Otunuga.
"While the heavily discussed Euro-parity dream may not be achieved in 2016, the divergence in monetary policy between the European Central Bank and the Federal Reserve could provide enough encouragement for bears to send the pair lower in 2017.
"Uncertainty still remains the name of the game when dealing with the Euro which could ensure the currency remains depressed moving forward."