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The British Pound Is Tumbling (Again)

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The British Pound Is Tumbling Again
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The British pound tumbled yet again Tuesday and lost more than 1 percent of its value against the greenback. It now costs $1.2216 to buy one British pound, marking a drastic decrease from its 52-week high of $1.5509.

As noted by Bloomberg, Tuesday marks the fourth consecutive day of losses for the pound after Bank of England policy makers talked about the currency in testimonies to politicians. Specifically, Anil Kashyap, a member of the Financial Policy Committee said that a "hard Brexit," a term used to coin an outcome in which the country loses complete and unrestricted access to the European Union, would result in further loses for the pound.

Some experts are estimating the UK's Treasury could lose 66 billion pounds a year and economic output could fall by as much as 7.5 percent after 15 years, if the country leaves the European Union under certain conditions.

Michael Saunders, a member of the Monetary Policy committee said in a written testimony that he won't be surprised if the pound continues to decline despite its already heavy losses.

The British pound is the worst performing currency among its 16 major peers.

The ongoing weakness has prompted by analysts from revising their longer-term outlook. According to Bloomberg, ING Groep, JPMorgan and Julieus Baer Group have all lowered their year-end forecasts since Thursday's flash crash sent the pound crashing by more than six percent in one minute.

Posted-In: Anil Kashyap Bloomberg Brexit british pound British Pound Flash CrashEurozone Forex Markets Best of Benzinga

 

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