The British pound reaches a 7-year low
This week, the British pound has been under huge pressure, brought close to seven-year lows against the greenback and financial analysts really don’t see anything to stop this fall.
On Thursday, the pound traded at $1.3943. On Wednesday, the US dollar dropped below $1.40 for the first time since March 2009, and the major UK’s currency first started falling below that level in Asia trade.
Normally, Asian currencies appear to be the most liquid. These currencies are traditionally the number one drivers in the global currency markets. Therefore, that’s so strange to see today’s situation in Asia, and in particular the pound’s behavior there, where it’s one of the greatest drivers.
The British pound and the evergreen buck is a well-known tandem, often dubbed “cable.” Well, the since Friday, the cable has lost up to 3.5%, when the floodgate of debate regarding the potential exit of Great Britain from the European Union is open.
Meanwhile, investment houses have been dropping a hint that the British pound could sag abruptly if Great Britain’s voters support leaving the European Union. Losses for the sterling started gaining pace right after London Mayor Boris Johnson over the weekend supported a campaign for Great Britain to leave the EU.