Black Wednesday: sterling hits rock bottom against the dollar and euro

As trading came to a close on Wednesday, sterling slid into the doldrums against the US dollar and euro. The exchange rates reached historically low levels leaving the pound in a remarkably weak position.

[USPRwire, Thu Nov 13 2008] As trading came to a close on Wednesday, sterling slid into the doldrums against the US dollar and euro. The exchange rates reached historically low levels leaving the pound in a remarkably weak position. Sterling dropped below €1.20 against the euro for the first time ever and below $1.50 for the first time since 2002. In one day, the pound lost 4% and over 3% against the dollar and euro respectively.

The landslide came on the back of comments earlier in the day from Mervyn King, governor of the Bank of England, who said the drop in value of the pound was part of ‘rebalancing’ the economy. With unemployment rising and interest rates predicted to fall to 2%, sterling is bound to be put under further pressure.

Elisabeth Dobson, head of private clients at foreign exchange broker World First said, “Sterling is in freefall. Currency markets have been volatile for some time now but to see drops like this in just a few hours is unprecedented.”

“Anyone with overseas liabilities needs to be talking to their broker now. Who knows what’s around the corner?”

Ends

For further information:

Wendy Casterton – 020 7801 1060 or email wendy.casterton@worldfirst.com

Notes for editors:
World First is a currency exchange broker, serving both private and corporate clients. Set up in 2004 by directors Jonathan Quin and Nick Robinson, the company is experiencing very fast growth and now employs over 50 people in two offices (London, UK and Hamilton, New Zealand). It has 20,000 clients and will transact over £1 billion in 2008.
World First’s corporate clients are generally import or export companies, making regular transfers. World First helps them minimise their exchange rate risk and manage their currency exposure.

Private clients largely use broker services to purchase a property abroad, usually a second home or investment or to emigrate.

World First is also now offering currency options to SMEs and private clients through World First Markets Ltd, which is authorised and regulated in the UK by the FSA. World First is the first and currently only broker to offer currency options which have, until now, been the preserve of very large corporate organisations through their banks.