Aug 17, 2016

    British pound hits historic low of $1.737 against Singdollar

    THE British pound has fallen to a new historic low against the Singapore dollar as concerns mount over Britain's economy in the wake of the Brexit vote.

    One pound is now buying about $1.737 on foreign exchange markets - the weakest the British currency has been since at least 1981.

    The latest exchange rate is down nearly 13 per cent from $1.992 on June 23 - the date Britain voted to leave the European Union - and $2.085 at the start of this year.

    The weaker pound benefits Singapore travellers, students studying there and local firms importing products from Britain.

    Singapore property investors looking to Britain also stand to gain, though they have to make a judgment on the future of the property market there.

    Persistent fears about the impact of a Brexit have weighed on the British currency. It is already this year's worst performing major currency against the greenback and is coming under more strain in the wake of data showing how the British economy is faring after the referendum.

    Most recently, the currency was hit by data showing that London residential rents fell for the first time in six years in July.

    The rental data came on the heels of numbers showing that home prices fell for the second straight month.

    Currency analysts say the pound is expected to remain weak given the risk of more negative economic data.

    Investors are waiting to see if the Bank of England's (BOE) latest economic stimulus efforts prove effective, said Phillip Futures strategist Bryan Lum.

    The BOE expanded its bond-purchasing programme earlier this month and also cut interest rates for the first time in seven years, in a bid to support the economy.