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Sterling Goes Down, But Gets Back Up

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The pound sterling is having a very rough week. Having dropped to a three-decade low against the Dollar on Tuesday to $1.27, it dipped even further on early morning trading on Wednesday, before recouping to $1.2726. The pound was down just 0.02 percent against the dollar. The Euro was not as lenient. The pound sunk to a five-year low of €1.1316, a 0.4 percent hit. It then rebounded later on to €1.1333, a 0.25 percent drop. In the space of three days, the pound lost two cents to both the dollar and the euro. The worst performance of the pound in 31 years has not exactly come as a shock to investors, but it could have been avoided. The tumble began after news broke from the Conservative Party Conference, where Prime Minister Theresa May announced that Article 50 would be triggered by the end of March 2017. It was later revealed that she would not be prioritising the financial sector in the Europe divorce, so that the UK won’t have to balk on immigration.

The Euro on the other hand has been gaining on the back of strong indicators from the region. Reports came out yesterday that the European Central Bank (ECB) would begin restructuring its quantitative easing programme. This programme currently spends €80 billion a month on bond-buying. The FTSE 100 was also down, despite the fall in pounds. It fell 0.3 percent at the open to 7,053 shares.

 

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