The Pound is likely to remain as popular as horse meat lasagne for the foreseeable future as the weak UK economic outlook deters investors.
The Pound Sterling Exchange Rate was in the region of 1.5183 against the US Dollar as of 10:40 am
Although the UK’s credit rating downgrade body-slammed the Pound to a 2 ½ year low against the US Dollar and a 16-month low against the Euro, the British currency was able to recoup some of its losses as trade progressed.
Sterling climbed slightly on the Euro as the common currency broadly softened following inconclusive election results in Italy, but analysts are largely expecting that the Pound will continue its downward trend in the days ahead.
So far this year the British currency has shed roughly 7 per cent against its American and Eurozone counterparts. If it continues to fall it will reduce the cost of exports, but it could well bump up import prices and create upward pressures on inflation at the same time – issues which could cause more suffering for the recession weary UK populace.
Since the UK’s credit rating was cut from AAA by Moody’s ratings agency, Chancellor of the Exchequer George Osborne (who has faced continued criticism regarding his approach to tackling the financial crisis) has had to defend his position once more. When challenged about the benefits of staying the course with the current austerity programme he stated: ‘Ultimately that is the choice for Britain: we can either abandon our efforts to deal with our debt problems and make a difficult situation very much worse, or we can redouble our efforts to overcome our debts.’
Shadow Chancellor Ed Balls responded: ‘The Chancellor needs to get out of his denial and get a new plan on growth, the jobs and the deficit that would actually work. Or else the Prime Minister would need to get a new Chancellor.’
4Q GDP figures for the UK are scheduled for release tomorrow, and with industry experts expecting them to increase rather than subdue concerns regarding UK economic recovery, the Pound could fall further against several of its most traded peers as the week progresses.
Financial institution Lloyds Bank released the following currency market comment this morning: ‘The Moody’s news was not a particular surprise, and can’t be regarded as a new reason to sell Sterling, but we are still very short of reasons to buy pounds, and expectations of more quantitative easing next month are building and will continue to discourage Sterling buyers ahead of next month’s Monetary Policy Committee’ meeting.
Current GBP Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading at 1.1592
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trading at 1.5183
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trading at 1.4788
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trading at 1.8239
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trading at 1.5558
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is currently trading at 140.1000
These exchange rates were correct as of 10:40 am
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