Credit Crunch

The Pound is falling

The value of the £ currency of the UK has been getting battered lately, falling sharply against the US $ and Euro amongst others this past week.

GBP or Sterling as its also known ended the week trading a fraction of its summer value which peaked above $2, GBP/USD Which will soon be trading as USD/GBP if things carry on ended the week the week trading around 1.47.

Analysts predict market sentiment to be bearish, the GBP/USD,  GBP/JPY and GBP/EUR charts show a falling trianlgle meaning the falling trend will continue. Fundamentals don’t look promising for Serling either many economists have said the U.K will be strongest hit by the recession and the Bank of England have announced a willingness to drop interests rates as low as 0%, UK Priminister Gordon Brown has also signalled further rate cuts are likely as he meets other G20 leaders in washington. A low interest rate may be good for borrowers but it doesn’t help the £ as potential investors look to put their money where it will see a greater return.

The UK’s Shadow Chancellor, George Osbourne has also been talking down the £ in his interview with The Times.

George Osbourne’s criticism of Gordon Brown’s financial policy, saying the Prime Minister was pursuing a “scorched earth” and Gordon Browns public spending plans, “The more you borrow as a government the more you have to sell that debt and the less attractive your currency seems.”

Means the pound is likely to fall further on Monday, want to make some money from this credit crunch? Sell GBP/USD and GBP/EUR.