MercoPress. South Atlantic News Agency
The Pound beats the Argentine Peso as worst performing currency in 2016
Some analysts are convinced the pound still has further to fall, with some predicting lows of US$ 1.20 against the dollar in the next three months. 
The Bank of England's admission that Brexit had already affected the financial stability of the UK weighed on the punt. 
Carney said that the two-day fall in sterling was the sharpest in half a century, but the lower value of the pound was “necessary” for other adjustments in the economy. 
Fiscal and current account deficits leave room for still more GBP weakness, according to Credit Suisse market strategists. The pound has beaten the Argentine peso to become 2016's worst performing currency after it plunged to a 31-year low in the aftermath of the decision to leave the EU. Sterling dipped below US$1.30 for the first time since 1985 in the second week after the European referendum.
It had rebounded slightly to trade at US$1.29 against the dollar by the end of the week. That brutal tumble means the pound has overtaken the Argentine peso as the biggest loser against the dollar among 31 other major currencies in 2016.
Some analysts are convinced the pound still has further to fall, with some predicting lows of US$ 1.20 against the dollar in the next three months.
Goldman Sachs has said the pound could go as low as US$1.20 against the dollar in the next three months, levels not seen since the summer of 1985.
Goldman Sachs analysts said that Bank of England warnings were behind the slide below US$1.30 last Tuesday and that further central bank announcements about interest rates and could see the pound weaken further.
Credit Suisse has also revised its three-month forecast from US$1.58 to US$1.22.
“We believe the UK economy's well-documented fiscal and current account deficits, combined with the fact that GBP is not especially cheap, leave room for still more GBP weakness,” said Shahab Jalinoos, global head of FX strategy at Credit Suisse.
The Bank of England's admission that Brexit had already affected the financial stability of the UK weighed on the punt.
Mark Carney, governor of the Bank of England, said markets were performing “pretty well” since June 23. He announced looser lending measures to encourage people to continuing making investments, prompting to pound to fall.
Carney said that the two-day fall in sterling was the sharpest in half a century, but that the lower value of the pound was “necessary” for other adjustments in the economy.
”The adjustment in sterling has been significant and was sharp initially. That adjustment has moved in the direction that is necessary to facilitate some of the economic adjustments that are needed in the economy,” he said.
The Bank of England's Monetary Policy Committee may cut interest rates below their historic low of 0.5% this week, though polls show economists expect a rate move in August.
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Read all commentsDoes this reflect the performance of the economy OR is it just nervousness about the seeming lack of direction of our“leadership”.
Jul 11th, 2016 - 09:35 am 0We have not left the EU as yet and trade seems to be business as usual.
Devaluation is a two edged sword. Foreign goods will become more expensive and less attractively priced so home manufacturers may have more business.
UK produced goods will be cheaper on the export market and may attract more sales.
Who knows ?
If anyone takes an inference that the UK's economy is worse than Argentina's they are disillusioned.
Who wrote this garbage? The calendar 2016 is only half done. The financial 2016 has barely started.
Jul 11th, 2016 - 10:18 am 0Amazing how the “failing” or “failed” state of the “little” United Kingdom has had such a massive effect across the world from the United States to China. Anybody noticed similar reactions to the state of the argie “economy”?
In other news, “insignificant” countries like China and India are queuing up to sign “special” trade deals with “little” Britain. The “always right” IMF is now forecasting a further recession for the eurozone and a possible collapse of the euro. Britain is in no hurry to invoke Article 50, although we will, and every day brings EU collapse closer. Why are EU “leaders” like Juncker so desperate? Possible end to his cushy job?
Only a nutter would believe that the performance of a currency during a 3-week period is realistically indicative of a year's performance.
Jul 11th, 2016 - 02:19 pm 0BTW, Argentina's economic growth over the past ten years showed the lowest rate of any major South American economy, once you discount the lies of CFK and her INDEC.
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