Currency Exchange UK

 

Pound falls amid Dubai Fears

Pound falls amid Dubai Fears

The sterling fell this Monday morning, nearing a one-month low against the euro as latest data showed an unexpected decline in UK consumer confidence.

The figures showed that there is still a high level of weakness in the British economy.  The pound also suffered as investors avoided it on the back of a European share tumble – this time thanks to the Dubai crisis.

Dubai’s debt problems have come to the forefront last week and this week after one of its key state-owned companies, Dubai World, asked for a six-month extension to repaying around $60 billion in debts.

According to some economists, problems in the Dubai economy mean problems for the British pound because of the added pressure that a weak Dubai economy has on the UK financial sector.

The United Arab Emirates central bank announced that it would provide support to Dubai banks, but investors still predict continued selling pressure on the sterling.  

Foreign exchange traders are now waiting for data to be released on UK money supply, mortgage approvals and consumer credit.