Sterling down 4 cents today.
While we thought all the problems in recent weeks were with the Euro, sterling has been faring even worse. The worst performer over the past week, past month and year to date.
One of the foreign exchange dealers is calling it the start of sterling’s collapse.
<i> Nick Beecroft, senior foreign exchange consultant at Saxo Bank perhaps summed up today’s mood. “This morning we have witnessed what can justifiably called the beginnings of sterling’s collapse,” he said. “So long as the markets could harbour some hope that the next government, in only three months time, would be a fiscally prudent, business-friendly Conservative one that would act swiftly to reduce the UK deficit and borrowing mountains, the pound was able to just about hold its own against the euro (which is itself entering a possibly fatally damaging period), but today the dam burst and it could not even do that, let alone against the almighty dollar – as of now perceived as the ‘best, worst’ major safe-haven currency. This weekend’s UK election polls predicting a Labour government, ruling over a ‘hung’ parliament, put paid to that dream.”
If Beecroft is right, expect the pound to fall to $1.30 against the dollar and approach parity against the euro. That’s good for exports but is going to make summer holidays to North America and Europe eye-wateringly expensive. </i>
We are all becoming poorer. Holidays in Bulgaria anyone ?