10 March 2009

The Pound's Low Against Euro

The pound is having an uphill struggle to shake off its weak status. On Tuesday, it fell to its lowest point against the euro in over a month. The housing market's continued slump and the latest gloomy surveys - showing poor UK retail sales - has had a continued negative effect on the currency.

The sterling's poor status is not aided by the world's view of the UK economy and in particular the banking sector. The latter has taken another blow thanks to the government's decision to up its stakes in Lloyd's.

On Monday, the pound fell by over 2 per cent against the dollar and the euro, which was its sharpest daily fall in a month.

Investors are increasingly looking to safer ground as the UK suffers. The Bank's decision to begin quantitative easing is also receiving mixed reactions.

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