British Pound: Don???t Expect 2008 to be a Good Year
The British pound was the worst performing currency this week, having fallen to a record low against the Euro, a 3 year low against the Swiss franc and a 1.5 year low against the Japanese Yen.
Even though the British pound has only fallen to a 9 month low against the US dollar, the fact that it has weakened against a currency whose outlook is just as dismal indicates how bearish investors are on the UK economy. Having missed an opportunity to be ahead of the curve by cutting interest rates on Thursday, the Bank of England will have a tough battle ahead of them because 2008 will not be a good year for the British pound. Next week, producer and consumer prices are due for release along with labor market numbers and retail sales which means that it will be another volatile week for the beleaguered currency.