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| AFP PHOTO |
The pound dropped below
$1.30 in Asia on Tuesday as the Bank of England’s post-Brexit interest rate cut
and surprise stimulus weighed on the unit.
Sterling fell for its fifth
day after the central bank last week voted to reduce rates to a record low 0.25
percent, cutting borrowing costs for the first time in more than seven years.
The central bank also
announced £170-billion ($221-billion, 199-billion-euro) stimulus package, which
it added could be expanded further.
The aggressive moves come in
response to fears that Britain’s vote in June to quit the European Union would
hammer the economy.
The pound tumbled to 30-year
lows in the aftermath of the shock referendum result.
In Tokyo on Tuesday, the
unit bought $1.2998 after earlier touching $1.2978, its lowest since mid -July.
It was at $1.3040 in New York on Wednesday.
“We could see some
short-term weakness in the pound,” Janu Chan, a senior economist in Sydney at
St. George Bank, told Bloomberg News.
“It was an extensive
stimulus program that the BoE announced.
“The economy has been hit in
the short-term, and could face a minor recession.”
In other trading, the dollar
edged lower to 102.34 yen from 102.49 yen.
The euro fetched $1.1085
against $1.1076 and 113.45 yen from 113.56 yen.
Despite edging down Tuesday,
the dollar has been winning support as upbeat jobs data on Friday boosted hopes
for a US interest rate hike this year.
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