Recession Continues To Hold Pound Down Against US Dollar

After an impressive leap from $1.48967 to $1.52009 in around 36 hours at the start of the month, where it stayed for around a week, the Pound has starting to decline against the US Dollar again – back to $1.49743 at 09:15 this morning.

Revisions to the UK’s economic data for the first quarter have been blamed, as it implies the impact of the recession is worse than it first seemed. Account deficit in the first quarter was the widest it has been since the winter of 2007 and peak to trough fall in output, which had been placed at 6.2%, was revised at 6.4%.

With the US corporate season opening, experts believe the Pound won’t gain back much ground against the US Dollar too soon; “investors will not want to be caught short of the dollar” Caxton has said. This is not, however, reflected in the strength of the Euro against the US Dollar, which has risen fairly steadily since the start of July; from $1.22118 on the 1st to $1.27027 on the 9th and $1.25695 at 09:30 this morning.