The British pound has fallen to a low measured against a basket of trading currencies not seen since the mid-19th century, according to the Bank of England (BoE). The effective exchange rate, calculated to mirror UK trade, is at rock bottom after hitting a low of 29.27. The mark is lower than the level sterling hit during the financial crisis, the introduction of floating exchange rates of the 1970s, and even the decision to leave the gold standard in the 1930s.
On Tuesday, sterling fell to a 31-year low against the US dollar over concerns of a possible “hard Brexit.” It traded as low as $1.2117 against the greenback. Under the BoE’s current formula for the trade-weighted index, the biggest contributors to the currency basket are Germany (22.5 percent), US (16.5 percent), France (12.6 percent), Italy (8.3 per cent) and Japan (seven percent). FULL REPORT