Is Mervyn managing the pound down?
/EIN Presswire/ Following continued coverage of the pound's dramatic slide against the euro and dollar, I wanted to get in touch and offer comment from Adam Bobroff, regular CNBC commentator and director of dealing at foreign exchange specialist Foremost Currency.
Adam comments, "It appears that Mervyn King is managing sterling's rate down to prop the city up.
"With the blame for sterling's decline rightly laid at Mervyn's door, it begs the question; does he have an agenda in deliberately damaging the pound to help our trade balance on exports? True - a weak pound will make financial products, the UK's only major export, more attractive to overseas buyers. However this is short-sighted expediency at its very worst."
"This is what is known in the trade as a 'managed' or 'dirty' float; an exchange rate system for the central bank to manage fluctuations in order to attract or detract capital flows. And it's a very dangerous game to play."
Please get in touch if you would like to speak in more detail with Adam regarding his views, to discuss the long term effects of deliberately managing the pound down and the fact that while it will make UK exports appear more attractive, the knock on effect on the cost of imports to the UK, such as food, could be exceedingly damaging.
Contact details:
Foremost Currency Group: 0800 781 0601
OctopusCommunications: foremost@octopuscomms.net
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