The Great Britain pound dropped against the US dollar to lowest level since August and to the low not seen since February against the euro on concerns that tomorrow’s report will show that contraction of the UK economy resumed. The currency gained on the Japanese yen.
Analysts predicted that tomorrow’s data will show a 0.1 percent decline of Britain’s gross domestic product in the fourth quarter of 2012. The decline would follow the 0.9 percent increase in the previous three months. Many experts believed that such growth was unsustainable and expected that the economy would go into recession again.
The sterling was especially vulnerable against the euro as reports from Europe were good for the most part, even though Spain’s unemployment climbed to the record of 26 percent. At the same time, the yen was even weaker than the pound as the threat of an intervention undermined the strength of Japan’s currency.
GBP/USD dropped from 1.5842 to 1.5783 as of 22:13 GMT today and its intraday minimum of 1.5754 was lowest since August 28. EUR/GBP jumped from 0.8402 to 0.8468 — the highest settlement since February 23. Meanwhile, GBP/JPY advanced from 140.39 to 142.55.
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