George Osborne, Chancellor of Britain, proposed last week an extreme spending cut of over 80 billion pounds in order to cope with the nation’s budget deficit of 156 billion pounds. According to economists, however, this action was ‘insane.’ As a result, the pound will drop below $1.40 this year, stated John Taylor, chief executive officer of FX Concepts Inc..
The U.S. dollar, on the other hand, fell on Monday, Oct 25, after the G20 meeting.
“It looks like the market has taken the G20 as a green light to continue with the trends up to that point, which have been towards U.S. dollar weakness,” concluded Sue Trinh, senior FX strategist at Royal Bank of Canada in Hong Kong.
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