The pound has lost further ground against the dollar today, sinking to a fresh 23-year low as data showed the UK economy shrank at its fastest pace since 1980 and confirmed Britain had fallen into recession for the first time in nearly 20 years.
UK gross domestic product shrank 1.5 percent in the three months to December, more than forecasts for a 1.2 percent decline. It was the largest quarterly drop since the second quarter of 1980.
Sterling has already dropped about eight percent against the dollar since the start of the week, amid widespread concerns about the British banking system and the government's growing debt.
Friday 23 January 2009
Sterling still under pressure against the euro
The pound has remained under pressure against the euro today, undermined by extreme risk aversion as investors continue to worry that the UK is heading for a deep financial crisis. Figures showing a fall in UK factory orders and a drop in automobile output yesterday also kept sterling under pressure, as they supported the view that the Bank of England will have to do more than cut interest rates to salvage the British economy.
The Pound falls again
The pound continued to be sold off today reaching record lows against the Japanese Yen. Sentiment is driving the pound to new lows every day and there doesn’t appear to be any floor. News from the U.K economy has been consistently bad and with concerns over the government’s debt rating there in no end in sight. Parity against the euro now seems a genuine possibility.
Caxton FX Senior Analyst, Alex Dunn, appears on Fox Business
Caxton FX Senior Analyst, Alex Dunn, appears on the Fox Business channel to discuss whether the pound will continue to fall against the dollar.
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