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Sterling tumbles to 18-month low against the dollar

Posted By admin On August 8, 2008 @ 2:53 am In Money Watch | Comments Disabled

Edmund Conway and Richard Blackden
London Telegraph [1]
Friday, Aug 8, 2008

Sterling tumbled to its lowest in more than a year against the dollar and weakened against the euro on fears that the UK economy is sliding into recession.

The pound, which a matter of weeks ago had been trading above the $2 mark, dropped sharply overnight in Asia to below $1.93 after the Bank of England’s decision to keep rates at 5pc prompted more traders to expect that the Bank will eventually cut rates.

With house prices sliding and consumers deserting the high street, an increasing number of currency analysts now expect sterling to fall to $1.90 and 80p against the euro by the end of the year.

(Article continues below)

City economists are also coming round to the view that the MPC’s next move in interest rates will be down.

“The dollar is strenghening across the board, but it’s by default because we’re getting downside surprises on the economy in the UK and Europe,” said Hans Redeker of BNP Paribas.

“Britons have had the cash machines in their gardens taken away and we’ve got a consumer-led slowdown,”

Full article here [1]


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URLs in this post:

[1] London Telegraph: http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/08/08/bcnpound208.xml

[2] Dollar Touches 14-Month Low on Outlook for Fed’s Target Rate: http://www.prisonplanet.com/dollar-touches-14-month-low-on-outlook-for-fed%e2%80%99s-target-rate.html

[3] Dollar Rises to Six-Month High on Bets Global Economy Slowing: http://www.prisonplanet.com/dollar-rises-to-six-month-high-on-bets-global-economy-slowing.html

[4] Asian Central Banks Intervene as Dollar Tumbles: http://www.prisonplanet.com/asian-central-banks-intervene-as-dollar-tumbles.html

[5] Dollar, Euro, Sterling May Be Destroyed Zimbabwe-Style: http://www.prisonplanet.com/dollar-euro-sterling-may-be-destroyed-zimbabwe-style.html

[6] Euro Falls to 13-Month Low Versus Dollar; ECB Debated Rate Cut: http://www.prisonplanet.com/euro-falls-to-13-month-low-versus-dollar-ecb-debated-rate-cut.html

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