The US dollar and British Pound have been the two worst performing of the major currencies over the past few months. Since July, the pound has lost 6.4 percent against a basket of the nine other most-traded currencies, including last weekÃ¢â‚¬â„¢s 1.29 percent drop. However, according to some, the worst is yet to come.
Ã¢â‚¬Å“ThereÃ¢â‚¬â„¢s definitely more weakness to come,Ã¢â‚¬Â said Hans- Guenter Redeker, global head of currency strategy in London at BNP Paribas SA. Ã¢â‚¬Å“The fiscal consolidation is going to hit the economy at a time when itÃ¢â‚¬â„¢s slowing. Under these conditions, you need to have loose monetary conditions and that weakens the exchange rate.Ã¢â‚¬Â
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