Pound Lies Bleeding In The Corner

The pound took another thrashing today, following BoE Governor Mervyn King's comments that a weak pound was helpful to British economic recovery. That would certainly seem to suggest that the BoE has no plans to arrest sterling's decline anytime soon.

We slipped below $1.60 against the dollar this morning, hitting $1.5918, before a bit of profit-taking ahead of the weekend kicked in.

Against the euro we bombed to 1.0880, despite cautionary comments from the ECB.

ECB Board member Yves Mersch said that he expects to see a “moderate recovery” in 2010 as stronger single-currency countries like Germany and France emerge from the recession, but warned that the financial system remains fragile.

Figures today reveal that consumer confidence in Germany has risen to a 16-month high

It should be noted here that neither the dollar or the euro are particularly strong. The greenback weakened against most of its major counterparts today slipping to a fresh monthly low against the yen.

Put simply the pound is the new whipping boy. Short sellers may book some profits this afternoon when the US market gets going, and traders will also be keeping a cautious eye on the G20 meeting.

Next week however could bring another kicking for sterling, particularly if the Sunday papers provide some more fresh ammunition.

I must have a look in the shed for that tin hat over the weekend....