The British pound fell against all major currencies today on the concerns that the United Kingdoms largest bank will have a disastrous time handling the bad loans of its United States unit.
The U. K. currency declined against the dollar and the euro as both the U.K. FTSE 100 benchmark index and the Japanese Nikkei 225 dropped during the late Asian and early European stock market sessions. The additional government help to the banking system will be needed to keep the financial system afloat in the United Kingdom. HSBC, the Britains largest bank, declined by 18 percent today.
The currency analysts link the pounds weakness directly to the countrys banks and the general stock market indexes. The British government has always been eager to give out the money to their banks and this giveaway policy cant go without increasing the monetary base, which leads to the currency depreciation.
GBP/USD fell from 1.4126 to 1.3883 as of 11:00 GMT today. EUR/GBP rose from 0.8970 to 0.9065, while GBP/JPY declined from 138.78 to 137.29 today.
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