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Pound Declines on U.K. Economic Figures

August 26, 2009 at 13:09 by Jan Baros

Great Britain poundThe pound posted another day of losses versus most of the 16 main traded currencies as the economic situation in Great Britain remains behind most of the other main global economies, decreasing attractiveness for the British currency.

Today’s published data and tomorrow’s forecasts are once again impacting the pound which is posting the sixth consecutive day of losses versus the euro, since U.K.’s economic outlook is currently far more negative than the Eurozone’s perspectives. Today, the German Ifo business climate came positive beyond expectations, helping the euro to climb to the highest level in almost 3 months versus the British currency, and this trend is likely to follow as tomorrow, a U.K. house prices report is expected to bring rather disappointing numbers, which would weigh on the pound even further.

Currency specialists forecast a rather complicated short-term future for the U.K. currency as other economic regions throughout the world, like the South Pacific and North America, are providing more consistent signs of recovery than the pound country, which is certainly decreasing attractiveness for the British currency, causing a mass capital outflow from pound-priced assets towards more attractive bets throughout the financial world. The pound is likely to remain bearish, until more optimistic reports start to appear in the United Kingdom.

EUR/GBP climbed to 0.8783 as of 11:02 GMT from yesterday’s rate of 0.8728. GBP/USD traded at 1.6279 from 1.6390.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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