Pound breaks above $1.51

(Source: Yahoo! Finance)

The pound rises above $1.51 following remarks made by Bank of England governor Sir Mervyn King yesterday. Our reporter Julian Harris:

The pound has sunk from $1.63 at the start of the year to lows of $1.49 this week, yet recovered yesterday to touch close to $1.51.

Sir Mervyn said the UK’s currency is now likely to be “properly valued” and suggested it should not slip much further.

“The fall in the exchange rate earlier this year offset the rise in the exchange rate in the previous year. Basically we’re at the same level we were after the impact of the financial crisis,” Sir Mervyn told ITV.

“It’s not falling further at present. It is broadly stable I think. We’re certainly not looking to push sterling down.”

Some analysts have accused the Bank governor of talking down the pound by indicating that stimulus from loose policy is more important than lowering inflation, as well as hinting that a lower pound would be welcomed.

(Full article)