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Euro parity on cards as pound remains weak
30 Dec 2008Sterling today remained weak against the euro but, with £1 buying €1.029, was up 0.6 cent since yesterday's dive.
Some traders predict the pound will reach parity within days, saying depressed forex dealing will extend its decline this week.
The forecast was fuelled by the Chartered Institute of Personnel and Development's warning that another 600,000 people will lose their jobs in 2009. Predictions the Bank of England will cut interest rates again next week added to the pound's weakness, as did the fall in the dollar that was prompted by the violence in the Middle East.
But analysts believe the pound will bounce back in 2009. But Antje Präfcke, currency strategist at CBCM in Frankfurt, said: "Sterling is continuing to be hit by the belief that rates in the UK still have to fall much more, and underlying fears of a very deep recession in the UK. There's still a gravitational pull towards parity in the thin market."
Reader views (1)
I wholly agree with The Church of England that Gordon Brown & his cronies are "morally corrupt" & where is our dear old Tony Blaire, enjoying himself with the taxpayers money as Special Envoy to the Middle East .... Good on you Tony,you know how to enjoy life
- Vincent, London, 30/12/2008 16:01
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