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Pound drops after weak data

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The pounds 3 day winning streak came to an end today on the back of weak economic growth figures which has investors nervous in the lead up to Brexit.

At 9.04pm (GMT) the local currency was trading at US1.4533 down 0.33 percent from yesterday’s trade.

Statistics out today showed UK quarterly growth slowed to 0.4 percent from 0.6 percent for the last quarter of 2015 marking its lowest level since 2012.

Although the pound reacted to the currency by pulling back, economic growth has not been the main driver of the currency according to Manuel Oliveri, a foreign-exchange strategist at Credit Agricole

"UK growth conditions have not been the key driver of the currency this year," he said.

 "Everything has been about Brexit fears." he added.

In the lead up to Brexit Mr Oliveri noted that the pound will become more volatile as the date comes nearer and traders should brace themselves for volatility,

"Sterling has been a bit volatile, and we believe the currency should become more volatile" due to concerns over Brexit and speculative short positioning, which is "quite elevated," he said

 

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