Sterling hits nine-month low

Sterling has shown a particularly weak performance on the foreign exchange markets recently.

The British currency reached a nine-month low against the dollar, falling to just $1.52 to the pound.

However, the currency is still some way off its 12-month low, at which one pound only purchased $1.37.

Analysts have suggested that speeches earlier in the week from the Bank of England governor Mervyn King, have put downward pressure on the currency.

Mr King announced that further quantitative easing may be needed to bolster the UK economy.

Concerns regarding the release of market data tomorrow (Friday February 26th) were also thought to be holding the pound down.

It is thought that the figures will reveal low gross domestic product growth (GDP) alongside a low level of business investment in the UK.

Howard Archer, an economist at HIS Global Insight, told Reuters: "The business investment data for the fourth quarter of 2009 are truly dire.

"It dilutes hopes of an upward revision on Friday to UK GDP growth ... and even raises the spectre that this minimal growth could be revised away."

Posted by Sarah Pitton

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