The United Kingdom’s (UK) current account deficit was £32.6 billion in Quarter 1 (January to March) 2016, down from a revised deficit of £34.0 billion in Quarter 4 (October to December) 2015. The deficit in Quarter 1 (January to March) 2016 equated to 6.9% of gross domestic product (
GDP) at current market prices, down from 7.2% in Quarter 4 (October to December) 2015, which remains the largest proportion since quarterly records began in 1955.
The narrowing in the current account deficit was mainly due to a narrowing in the deficits on secondary income and primary income, partially offset by a slight widening in the total trade deficit. The total trade deficit widened to £12.0 billion in Quarter 1 (January to March) 2016, from £11.6 billion in Quarter 4 (October to December) 2015. This was due to the trade in services surplus narrowing by £0.5 billion, partially offset by a slight narrowing in the trade in goods deficit (£0.1 billion).
Sterling is currently being traded few points above 1.33 level. Pair is likely to find support around 1.32 handle and resistance above 1.34 level.