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News Link • Currencies

Race to Debase Currencies: Pound Falls to Five Month Low as King Says Declines ‘Helpful’

• Commodity Trader Alert

Bank of England Governor Mervyn King said the weakening pound is “helpful” in rebalancing the economy, the Newcastle Journal cited him as saying in an interview. Prime Minister Gordon Brown told reporters in New York today he welcomes “all the factors that make for a stable economy.”

“A currency, which the country’s own central bank likes to see weak, obviously is not an attractive investment,” Commerzbank analysts including Lutz Karpowitz in Frankfurt wrote in a research note today. “If King keeps digging then he is clearly signaling that he does not care about this loss of trust.”

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