POUND BREAKS $2 BARRIER

The ongoing weakening of the US dollar reached a significant benchmark this week, with the US currency breaching the $2=£1 barrier for the first time since 1992. Expectations of further interest rate rises in the UK, coupled with weaker-than-expected financial data in America, saw sterling lift to $2.003 on Monday; though the dollar quickly strengthened after that point, the two-dollar barrier was broken again on Tuesday and sterling seemed to be holding at above two dollars through the rest of the week.

At press time the pound was worth $2.0045, with further gains being predicted in the run-up to the next meeting of the Bank of England’s policy committee on May 10, at which interest rates are expected to increase to 5.5 per cent – which would be the fourth increase since August. Meanwhile, the dollar – also weakening against the euro – is expected to take further hits in the face of what are expected to be gloomy economic figures through the end of April.

“For those planning to take the plunge and buy in a dollar country, or even go on holiday, now is a fantastic time to get the most for your money… It’s worth remembering that the last time the pound traded consistently above $2 was in 1975.