Currency exchange rate 'survives change in government'

Sterling's currency exchange rate has recovered from the initial shock of the election results.

When the results came in that no party had won an overall majority, the currency exchange rate between the pound and the euro fell by four per cent, while the pound's worth against the dollar dropped by three per cent in just one day.

As the country coalition government reaches its 100th day in power, however, the currency exchange rates for sterling against both the US dollar and the euro have risen significantly.

The euro rate has rebounded by seven per cent, while the pound has gained eight per cent on the dollar.

Andrew Scott, currency dealer at foreign currency exchange specialists HiFX, commented: "With the new government appearing to be holding together well, along with budget cuts initially protecting the pound's credit rating, it seems that investors have started to look at the UK differently.

"This positive news for sterling, set against the backdrop of continued Euro downgrades and fears of a double dip US recession, has put the pound into the limelight as a potential safe haven currency."

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Posted by Eleanor Ward