posted under sexy-news by Nicholas-Admin

Wow, I am really at a loss of words. I must say, We live in some rough economic times that is affecting everyone around the world. I recently came across some articles in the Wall Street Journal, Bloomberg news, and Financial Post, Indicating that the Pound has lost 30% of its value against the Dollar, 20% of its value against the Euro, and 40 % against the yen in just the past year alone. It is currently in a 23 year low. Check this out:

The pound is trading at levels that indicate Britain may lose its AAA credit rating as the government increases borrowing to pull the economy out of its first recession in 17 years, according to Merrill Lynch & Co.

“The market is now pricing the pound in expectation of a downgrade,” Merrill Lynch strategists including Emma Lawson in London wrote in a report today. “The pressure” is “on the U.K.,” the analysts wrote.

The British currency traded near a record low against the yen and close to the lowest level versus the dollar since 1985 on speculation the government will take control of some of the nation’s banks.

The sad part is that UK Investment Bank Barclays Bank PLC’s stock price has fallen so low so fast that it has wiped away 24 years of growth in London trading, the U.K. currency had fallen to a low of US$1.3622 as of Wednesday January 21st, 2009. At one point it dipped below $1.74 in Canadian funds, a level not seen since September, 1985.

There’s little light ahead for the beleaguered pound, say some currency experts. The economic news is “horrendous,” says Neil Mellor, a London-based currency strategist at the Bank of New York Mellon. “There is very good reason for panic at the moment.”

In one worrisome sign, investors not only dumped the pound earlier this week, but also shed U.K. stocks and government bonds, sending their yields up. Such a combination, if sustained, would raise the fear that investors are exiting from a host of U.K. assets, creating a vicious cycle that is difficult to arrest.

While the dollar continues to benefit from its unique position in financial markets for now, it is far from clear that the resilience will last. “Right now the market is beating up on the pound, but at some point it will look for something else to pick on,” says Paul Mackel, a currency strategist at HSBC in London.

The fact that the Federal Reserve stands ready to use a host of unconventional measures to flood the economy with liquidity in an effort to stimulate growth “could hurt the dollar quite badly” later this year, he says.