International Finance–“Source One International”– (Pound Sells Off)...

March 30, 2010 - PRLog -- “Source One International”: The British Pound fell to a 9-month low against the US dollar as investors concerned over Greek sovereign debt began to speculate that the United Kingdom faces a similar if not more challenging predicament.

 “Source One International” analysts said that the issue is being exacerbated by the reluctance of both main political parties to set out a plan of action to tackle the country’s growing deficits which threaten to exceed Greece’s 12% of GDP.

Despite this, some economists believe that any attempt to reduce the country’s deficits prematurely could send the pound to below parity with the euro and as low as $1.05 against the US dollar.
“Source One International” analysts described such notions as “absolute drivel” citing the fact that it is the scale of the debt that is responsible for sterling’s plight and that the addition of further stimulus would simply result in the deterioration of the situation.

Sterling has lost some 30% of its value since the beginning of the financial crisis and has failed to boost Britain’s exports as expected. The devaluation has increased the price of imports including oil as the currency buys fewer US dollars than before.

“Source One International” said that there was little chance of the political parties presenting a cast-iron plan ahead of the general election and this uncertainty left sterling at the mercy of speculators.