The British Pound Sterling extended the previous two days’ losses on Thursday, January 11, as a struggling retail sector and a widening trade deficit raised concerns among some investors that the currency’s recent gains could be overdone.
The British currency fell to a two-week low in early trades, with some market analysts saying the pound’s decline this week opens the door to more losses in the near term.
On Thursday sterling edged 0.2 percent lower to $1.3484, with some market strategists expecting it to weaken to early December lows of about $1.33.
“Of all the currencies, the fundamentals are weakest for sterling, and we have a critical technical level here with the pattern for the last few days looking remarkably similar to the highs last September,” said John Marley, head of FX strategy at currency risk-management firm Infinity International.
Britain’s biggest retailer Tesco missed forecasts for Christmas trading as strong food sales were undermined by weak demand for general goods such as DVDs and computer games.
Economic data has also weighed this week, with the British trade balance for November widening to its biggest in five months, putting further pressure on sterling bets.
Investors have warmed to the bullish sterling theme in recent weeks on expectations of some progress in Brexit negotiations.
Net long bets on sterling are near their highest levels in more than three years, according to data released by the U.S. Commodity Futures Trading Commission on Friday. Against the euro, sterling was little changed at 88.53 cents, Reuters reports.
