HiFX: Sterling is oversold and undervalued

Sterling is "still looking oversold and undervalued", it has been claimed.

Yesterday's decision to cut interest rates to one per cent was widely anticipated and therefore had "no negative impact" on British money, explained currency strategist at HiFX Marc Cogliatti.

He added, the cut has not stopped sterling's progress against the euro and its value has now risen almost 12 per cent against the tender.

Businesses that import across the channel should now get a "much-needed respite" after many will have experienced tightening profit margins due to the weak pound, Mr Cogliatti added.

He suggested the rebound will also be good news for holidaymakers heading to Europe this year "who had been facing the prospect of getting less than one euro for their pound."

Mr Cogliatti concluded there was also rising hope for companies who deal with American clients because of the recent rally in exchange rates.

According to the company, as of February 6th 2009 at 10:15 GMT, the pound was trading against the euro at 1.46.

HIFX is a foreign exchange specialist.