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Forex

Trade-weighted sterling dips

forex

The pound fell close to its lowest level ever against a trade-weighted basket of currencies this week, as investors continue to worry about the terms of Brexit.

Sterling dipped to a new, 31-year low against the US dollar and a new five-year low against the euro on Wednesday before turning slightly higher against both.

The U.K. currency has now lost about 45% of its value against the Bank of England’s trade-weighted index since peaking against that benchmark in 1981.

The pound has been even lower against this index, but on only a few days. That was during the peak of the 2008-09 financial crisis.

The Exchange Rate Index is the Bank of England’s favoured method of measuring the strength of the pound. Its weighting is based on the UK’s trade in goods and services.

Paul

The author Paul