Pound's Strength May Pose Problems

Having the past year’s best-performing major currency may become a burden for the U.K. economy, according to Goldman Sachs Group Inc.

After reaching the highest level since 2008 on July 7, a trade-weighted index of the pound fell for a third day today as a report showed shop prices tumbled by the most since at least 2006 in June. A gauge of inflation expectations dropped to a three-month low, adding to signs the strength of the currency may be impair future growth.

“The currency is up on a trade-weighted basis almost 10 percent in the last year,” Kevin Daly, an economist at Goldman Sachs in London, said in an interview on Bloomberg Television’s “On The Move” with Manus Cranny. “That leads us to expect that while growth will remain strong, it will moderate to some extent as the year goes through.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

RELATED TOPICS