The Great Britain pound sank against the US dollar, reaching the lowest since July, and edged down versus the euro today as Bank of England policy maker Martin Weale said that weaker currency can be beneficial for the economy. The sterling was flat against the Japanese yen.
It looks like the past Group of Twenty meeting not only failed to deter central bankers from devaluing currencies, but in some way even encouraged them by ignoring Japan’s practices. Weale said:
It may be that high levels of uncertainty and a reluctance to take on new risks have stood in the way of exporters seeking new markets and domestic producers doing what is needed to displace imports. Provided the calmer atmosphere we have seen since the summer is sustained, we may see further benefits of the depreciation.
The comments supported the bearish outlook for the sterling. Amid the extremely accommodative monetary policy and the economy sliding into recession, there are no reasons for the currency to be attractive for investors.
GBP/USD slid from 1.5503 to 1.5465 as of 16:56 GMT today and its daily low of 1.5436 was lowest since July 13. EUR/GBP ticked up from 0.8606 to 0.8629, reaching the high of 0.8645 intraday. Meanwhile, GBP/JPY was little changed at 145.25.
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