By Tom Lydon:
With the British economy teetering on another recession, market observers are anticipating new stimulus measures from the Bank of England, driving the British pound currency, along with a related exchange traded fund, to a three-year low.The CurrencyShares British Pound Sterling Trust (FXB) dropped 4.4% over the past three months.
Tokyo (AFP) - The British pound surged to a more than two-year high against the euro Friday, while it also rallied against the dollar as early results suggested Scotland will vote against independence from the United Kingdom.
Hickey and Walters (Bespoke) submit:
The US Dollar Index has pulled back from 52-week highs in recent weeks, and it is now sitting just above its 50-day moving average. At the same time, the euro really hasn't bounced much, and it remains in a nasty downtrend. Two currencies that have gained ground in recent weeks are the British pound and the Swiss franc.
First it was China hinting that where Silk Road failed in monetizing, pardon the pun, BitCoin, the world's most populous nation could soon take the lead. Then, none other than private equity titan Fortress said it had great expectations for the digital currency. Now, it is eBay's turn to announce that it is preparing to expand the range of digital currencies it accepts, adding that "its payment unit PayPal may one day incorporate BitCoin." But not just yet.
The pound dropped to a fresh five-month low against the euro and lost ground against the dollar on Friday as traders continued to punish sterling following comments from Mervyn King, governor of the Bank of England, earlier in the week.
The pound dropped to a five-month low against the euro after the market reacted to a Bank of England report warning that the financial crisis could have prompted a downward reassessment of sterling's long-term value
The pound sterling was worth just 1.1526 euros in London trade on Thursday, its lowest since the 1999 creation of the European single currency. The Bank of England is expected to lower its interest rate later in the day.