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There were a number of factors exerting pressure on sterling against the US dollar this morning.
We have general risk aversion in equity markets, as well as renewed banking sector concerns.
These concerns were ignited by the Sunday Times, which reported that Lloyds Banking Group may announce losses from writedowns of as much as £13 billion.
In the meantime, the FT reported that McDonalds has decided to relocate its European headquarter from London to Geneva in order to take advance of preferential intellectual property tax laws – a development that may encourage other companies to follow suit.
‘Sterling is particularly at risk and will likely underperform against other major currencies,’ said Ian Stannard of BNP Paribas. ‘We expect more negative data to come out of the UK.’
