Pound of flesh

There was bad news for Brits seeking to buy property in USA after the UK pound hit a seven-year low against the US dollar as markets reacted negatively to the British Government's £200 billion bank bailout and the level of Britain's debts...

It fell to just $1.39 and also dropped to just €1.07, undoing recent gains. The three per cent fall against the American dollar took the pound back to a level last seen in July 2001. In March 2008, sterling stood at €2.04.

"There's a distinct souring of investor sentiment toward the UK economy," said Simon Derrick, Chief Currency Strategist in London at Bank of New York Mellon Corp, told Bloomberg. "Sterling will stay under pressure."

Nick Fullerton, MD of FC Exchange comments, "Sterling is extremely weak at the moment and with ever increasing amount of negative data being released in the UK, this doesn't give Sterling much of a leg to stand on.

"Parity is becoming topical again, even a triple parity, despite it being narrowly avoided in December.  All eyes are now on the Bank of England to make its next move - another interest rate cut may allow the currency to stabilise again, but for how long we don't know."

Source: www.homesoverseas.co.uk/news