GBP crashes following the negative interest rates discussion
The rumours about the possible introduction of negative interest rates in the United Kingdom impacted the forex market on May 22. The currency is losing value while the bonds are seeing a record rally.
The pound lost 0.4% and traded at around US$1.2176. The currency’s losses this quarter totaled at 1.9%. The pound is now the worst performer of the G-10 currencies. In March it dropped to the lowest position in the last 35 years - US$1.1412.
The pound went down in trading against the dollar following the latest statement of Dave Ramsden - the Governor of the Bank of England. He claimed, that he does not rule out the introduction of the negative interest rates in the near future.
The latest report demonstrated that the national budget currently has a 62.1 billion pounds of deficit. The retail sales crashed as well, contracting by 20% in April.