Figures exposing the UK’s public debt addiction made for sober reading on Tuesday, causing the pound to sell off throughout the day against most of its major adversaries. The £13bn public sector net borrowing figures for the month of June were the worst since records began, and compared unfavourably in comparison to the June 2008 far lower reading of £7.5bn. UK plc has now racked up a total of nearly £800bn of debt (nearly 55% of GDP); eye watering figures in anyone’s books. More worrying is that the government is struggling to kick the habit, or acknowledge it has a problem, as even its own forecasts see borrowing levels climbing in the future.

Earnings season marched on in the US with Caterpillar, an important indictor of construction strength releasing earnings well above forecast, spurring sentiment and equities higher and of course sending the dollar lower. Testimony from Fed Reserve Chairman Ben Bernanke was typically diplomatic in nature, noting that he believed the economy was showing some “tentative signs of recovery”. Easing fears that interest rates would go higher in the near term he also hinted that the bank would be accommodative for as long as it can to the economy. His testimony continues today, and the dollar will stay under pressure if he keeps this bullish stance.

The Bank of Canada left interest rates at an unsurprising 0.25%, however the loonie moved into strengthening mode as oil jumped 2% over the day. Equity markets continue to feed off each other in Europe, continuing 7 straight days of gains  and helping the euro stay around 6 week highs against the dollar

The main focus of data today will be the Bank of England minutes announced in the morning session, while attention will be cast to the US in the afternoon for housing figures.

World First’s Twitter page is up and running and we will be live ‘tweeting’ the impact of all these data releases and how they affect the markets. Click below for up-to-date news on all things currency. The address is http://twitter.com/World_First

Please feel free to contact me (rick.roache@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our: Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080.

Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.