UK Pounds Crashes against US Dollars, Now $1.28 Per £1 In Asia Trade.
Following the Britain’s exit from the European Union, EU, on June 23, the Sterling pounds has crashed to its lowest value against the US dollars — $1.28 per £1, on Wednesday, July 6 in Asia trade.
Reports says the falls follow decisions by fund managers, including Standard Life and Aviva, to stop investors withdrawing money from their UK property funds. And quite predictably, Investors are dumping the pound due to high level of uncertainty, causes the hard currency to dropped roughly 15% since the referendum day, when it reached $1.50.
Investor confidence was further undermined by the Bank of England’s warning on Tuesday saying that the economic outlook for financial stability is “challenging.” The central bank announced an easing of capital requirements for banks and said it would provide more support for the financial system.
At this pace, many financial analysts are not optimistic about the future the UK currency. They wager that the pound would keep plunging. According to Kit Juckes, a global strategist at Societe Generale, the bank’s medium term target for sterling is $1.2319.
Or based on theory of George Soros, the legendary investor whose massive speculative bet against the UK pounds in 1992 earned him a reputation as “the man who broke the Bank of England,” the sterling could slump 20% to $1.15. Soros said his warning was based on “six decades of experience in financial markets.”
However, they believe there’s an advantage as FTSE 100 index has bounced back to pre-referendum levels within a couple of days.
The crash in UK sterling pound has no effect on the Nigerian currency, positively or negatively as the N365.82 : £1. With further devaluation of the naira due to pressure from the Forex market, the fall of pound is expected to be of any advantage to Nigeria. Although, that is left to be accessed in the Nigerian stock market and financial experts.
Chinese currency, Yen, another haven investment, strengthened against the US dollar at ¥6.69 : $1.