Sterling drops at sharpest rate for a year

Sterling has dropped at its sharpest rate in nearly a year, according to foreign currency exchange rates.

The currency dropped against the dollar this morning (Monday March 1st), to reach $1.49.

This is the first time that the currency has traded below $1.50 since May 2009.

According to analysts, the significant reduction in value is due to further concerns over a hung-parliament result in the UK's forthcoming general election.

A Sunday Times poll revealed that the Conservative party's lead has narrowed recently.

This resulted in renewed concerns that the country would not be able to make strong economic decisions without a united leadership.

Lee Hardman, a currency strategist at the Bank of Tokyo-Mitsubishi London, told the Daily Telegraph: "Markets had been expecting that the worst case scenario would be a minority Conservative government.

"In terms of fiscal credibility, a minority Labour government is the worst scenario."

Sterling performed poorly against the other major world currencies today as well, registering a 1.42 per cent drop against the euro.

Posted by Sarah Pitton

Click here to see how much you can save with HiFX's Foreign Exchange services (www.hifx.co.uk/online)