Pound Touches Record Low on G-20 Meeting

The British currency was once again affected by the international economic scenario reaching the lowest rate versus the euro in six-months, as the G-20 announced that banking institutions will be better regulated in order to avoid future credit crunches, reflecting negatively in the already weakened British financial system.

The pound is losing versus virtually all of the 16 main traded currencies towards the end of this week as the Group of 20 is likely to present a new set of regulations for financial institutions, as an attempt to predict future credit crunches like the one which led the world economy to the biggest slump since the Second World War. The pound traded below $1.60 for the first time since June, and lost versus the euro as well, fueling speculations that it may trade at one-to-one against the Eurozone currency in the mid-term future.

The Banking system in the British Isles has been one of the most fragile as the credit crunch shook the world last year, with several institutions having to be rescued by the U.K. government. The new regulations presented by the G-20 are likely to restrict, to some extent, bank profits, which is certainly negatively for the U.K.’s agonizing financial system, setting the already weak sentiment towards the pound, to even lower levels.

GBP/USD traded at 1.5995 as of 11:53 GMT from a previous rate of 1.6090 yesterday. EUR/GBP touched 0.9177 from 0.9112.

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