Sterling in slide against dollar

| July 8, 2005 | 0 Comments
Sterling in slide against dollar

Thursday’s events in London, say some analysts, have given investors one more reason to shed the pound.

Still, most analysts believe that with sterling on the slide anyway, the effects of the terrorist attacks in London will be temporary.

One analyst said that it would take more attacks in the short-term, a significant drop in consumer spending, and a significant shift in monetary policy for the effect of Thursday’s events to have long-term consequences.

There had been rumors of an emergency meeting of the Bank of England to cut interest rates, but these were denied. An announcement that there would be no change in rates this month had come out of the regular meeting of the Bank of England on Thursday.

Sterling lost 1.7 percent in relation to the US dollar this week, to close at $1.7357 on Friday, a nineteen-month low. It lost 1.9 percent on the week against the euro, to £0.6876, and fell 1.3 percent this week to ¥194.72 in relation to the yen.

Sterling has lost 4.8 percent to the dollar and 3.6 percent to the euro in the past two weeks.

The US dollar, meanwhile, was flat for the week against the euro, closing on Friday at $1.1930 even though it had reached a 13-month high against the European currency earlier in the week.

Payrolls data out of the US were disappointing as figures showed 146,000 jobs were created in June, 50,000 less than had been expected.

The Swiss franc ended the week down 0.3 percent in relation to the US dollar, ending at SFr1.3015, even though it is considered a safe investment in times of upheaval.


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