Speculations that the Bank of England will take further measures to stimulate the national economy brought pessimism to British markets, setting the pound down against currencies like the euro, dollar and the yen.
The London Stock Exchange started this week negatively, as forecasts indicate that British companies will continue to post weak results for the following month, adding to the already present pessimism in world markets, initiated by a U.S. employment report last week that was interpreted as an evidence of a longer-than-expected period of recession for the United States, and consequentially, in a world scale. The Sunday Times affirmed that the Bank of England may increase its program of asset purchase by $40 billion, as an attempt to rescue Great Britains faltering economy, but consequently affecting British bonds and currency outlook.
Economists are certain that the pound short term future will be bearish, as markets are getting more nervous concerning an economic recovery that has been already delayed. British currency specialists indicate that virtually nothing can provide support for the British currency, GDP numbers show a deep contraction on the way, policy makers are constantly trying to rescue British financial system, the global outlook decreases attractiveness for pound assets priced, and finally the growing risk aversion is likely to set the pound further down for the following weeks.
GBP/USD fell and traded at 1.6112 as of 11:56 GMT from an opening price of 1.6315. EUR/GBP rose to 0.8620 from 0.8557.
If you have any questions, comments or opinions regarding the Great Britain Pound,
feel free to post them using the commentary form below.
Be First to Comment