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British pound’s swings cause uncertainty for business

Tourists take photos of the River Thames, with St Paul's Cathedral, left, at low tide on the south bank in London, Monday, March 23, 2015. (AP Photo/Alastair Grant)
Tourists take photos of the River Thames, with St Paul's Cathedral, left, at low tide on the south bank in London, Monday, March 23, 2015. (AP Photo/Alastair Grant)

By Associated Press 4 min read

LONDON (AP) – The British pound is getting caught between the dollar’s surge and the euro’s slump, and its swings are shaking things up for business just as uncertainty grows over a potentially tight general election.

Caught in the crossfire of developments in the United States and the 19-country eurozone, the pound has dropped to a 5-year low against the dollar but pushed to a seven-year high against the euro.

Against the dollar, it is trading below $1.50, its lowest since 2010, largely due to expectations that the Federal Reserve will start raising interest rates this year. Higher rates tend to bolster a currency’s value.

At the same time, the pound has perked up against the euro amid concerns over the eurozone economy that prompted the European Central Bank to launch a 1.1 trillion euro government bond-buying stimulus program. The pound this month rose above 1.40 euros to the highest level against the euro since the end of 2007.

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