Offlate, U.K. has been producing lackluster economic numbers right from sluggish retail sales numbers to trade balance, manufacturing, construction and service PMIs. These vital economic numbers have failed to cushion GBP’S depreciation.

As a result, Sterling against dollar has been collapsed almost about 11.67% in last 10 months, observing at the current GBP environment we could foresee more room for hedging its depreciation.

From last 1 week, GBPUSD shows loss of 2.69%, a drop from highs of 1.4459 to the current 1.4070 levels.

For now, U.K. Industrial Production is scheduled to be announced for tomorrow.

The driving forces of further GBP’s depreciation:

Among vital factors that cause considerable risks to GBP the major jeopardises to the trade are:

1) The UK referendum that is scheduled on 23rd June has been boosted with pessimism as
Euro-sceptics were celebrating on Wednesday night after a Dutch referendum dealt another blow to the EU, with 61% of people who voted rejecting a free trade deal with Ukraine.

The ICM and YouGov online surveys both gave "In" a one percentage point lead over "Out." Britons vote on June 23 to decide on Britain's EU membership.

2) Central bank in both U.S. and U.K. sending dovish tones owing to macroeconomic risks. 

In addition to that, the industrial production growth in the United Kingdom has weakened in recent months, as overall industrial output rose just 0.2% on a year-on-year basis in January.

Weakness has been broadly based, with manufacturing production having registered negative growth on a year-over-year basis for eight consecutive months through January.

With the manufacturing PMI at its lowest level since 2013 in February, it seems unlikely that manufacturing production rebounded meaningfully during the month.

We will also get readings on the U.K. services and construction PMIs for March next week. These two indices have been more firmly in expansion territory than the manufacturing index, but both have weakened somewhat in recent months.

With potential “Brexit” looming and global economic headwinds showing few signs of abating, real GDP growth in the United Kingdom may remain soft, albeit positive, in the coming quarters.