Will the Pound Shrink with U.K.’s Economy?

The pound has been one of the biggest losers this year in foreign-exchange markets since several reasons, specially due to an artificial credit bubble that destabilized the British economy when the global slump crushed the world last year, forcing the pound down significantly, mainly versus the euro.
The Great Britain pound did not manage to perform well again this week in foreign-exchange markets due to a gross domestic report published this Friday that surprised analysts which forecast a timid, but important quarterly growth for the British economy, which was not confirmed, indicating that the United Kingdom remains in the worst recession in more than 50 years, shunning traders and investors from positions in the United Kingdom. British Isles economic outlook is more than a reason for the Bank of England to maintain its quantitative easing measures, which even if have not been enough effective, the situation could be worse if such measures would have not been taken, as a side effect for its asset-purchase program, the pound has been losing virtually every week in currency markets.
The GDP figures destroyed the improved sentiment towards the pound after Mervyn King‘s comments suggesting that interest rates would be raised at some point, bringing back pessimism that the present economic situation in the United Kingdom remains complicated, forcing the pound down for another week.
GBP/USD closed this week at 1.6310 after touching 1.6693 before the GDP report.

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