Sterling volatile after Autumn budget

Daily Currency Update

UK Chancellor Jeremy Hunt confirmed in his Autumn Statement yesterday that the country was in recession, while announcing £55 billion worth of tax rises and spending cuts. The news come with little surprises as the government attempts to plug a substantial fiscal black hole. The bleak outlook for the UK economy saw the Sterling fall yesterday afternoon against the USD and EUR, respectfully touching 1.1760 and 1.1000 at the lows. However, the Pound has recovered overnight and would have been supported this morning by November consumer confidence figures and October retail sales. GfK consumer confidence for the U.K. climbing to -44 in November, which was a rise from -47 in October and was considerably better than the expected -52. A better than expected retail sales rose 0.6% although this still represents a fall of 6.1% on the year. GBP/USD is at 1.1900 and GBP/EUR is making a play for 1.1500.

MPC members Haskel and Mann are both due to speak today, but their sound bites will likely be overshadowed by ECB president Lagarde who is due to speak at the European Banking Congress, in Frankfurt. In the afternoon, we also see the latest home sales data from the US.