Sterling declines as outlook for debt crisis plan deteriorates

The recent movement of the pound appears to have been driven by the events occurring in Europe at the moment and the varying confidence forex traders have in EU leaders to find a solution to the debt crisis, an expert has stated.

Yesterday (October 20th), the UK currency fell against 12 of its 16 major counterparts, as France and the European Bank disagreed over the plans to use its balance sheet to support the €440 billion (£383 billion) European Financial Stability Facility, reports Bloomberg.

It fell 0.5 per cent against the dollar to $1.5692 and dipped 0.4 per cent against the Japanese currency, dropping to 120.63 yen.

Chris Walker, currency strategist at UBS AG in London, told the news provider that the recent movement is "all eurozone driven", adding: "Over the next one to three months I could see sterling pushing to between $1.55 and $1.50."

Officials in Europe are set to meet on October 23rd to finalise plans to deal with the debt crisis.

Posted by Greg Secker