Famous investor (and China and commodities booster) Jim Rogers recently commented that the pound did not have a very bright future, to say the least:
Jim Rogers, chairman of Singapore-based Rogers Holdings, said the “U.K. is finished” and investors should sell the currency. Commonwealth Bank of Australia said there was a high risk of a cut to the country’s credit rating outlook and lowered its pound forecast. Prime Minister Gordon Brown authorized a 100 billion pound ($142 billion) bailout for banks. “I would urge you to sell any sterling you might have,” said Rogers. “It’s finished. I hate to say it, but I would not put any money in the U.K.”Not being on the shy side on matters of international importance, the French are not too happy about this state of affairs. Economic Minister Christine Legarde is crying foul, seeing that the British pound may be getting an unfair advantage from all this "quantitative easing"--a euphemism for allowing the currency to bear the brunt of adjustment via (competitive) devaluation:
French Economy Minister Christine Lagarde said on Wednesday the Bank of England should take more steps to support sterling. "I note the Bank of England is doing what it can, but its monetary policy and management of rates ... have not been particularly efficient for supporting the currency a bit more," she told a parliamentary hearing. "It would be in their interest to support it a bit." There was "strong volatility" in sterling, the minister said, adding: "Very clearly monetary markets are worrying about how sterling is faring, looking at the British economy."
In the past year, the British pound has lost around 30 percent versus the dollar, 20 percent versus the euro and more than 40 percent versus the yen
, according to Reuters data. Such depreciation, while making imports dearer, gives the British exporting industry [whatever is left of it] an edge in price competition with rivals in world markets.
In London, a UK Treasury source told Reuters: "The Bank of England's policy is to target inflation, not the exchange rate."