Will GBP recover if the interest rate cut is executed?

Question

GBP dropped sharply against JPY after Mr Darling 's grim warning.

Answer 1

It will probably drop further unless the value of the pound is already priced at the current rate due to expectation of a rate cut.

Traders in the past have tried to force currencies down when they see signs of weakness or forced reactions to help currency rates.

I personally feel interest rates should rise as by allowing the pound to devalue against all major currencies the UK is actually importing inflation.

However there will be many who disagree with me so I can expect plenty of thumbs down no doubt.

Answer 2

As an American, I hope the Pound tanks against the dollar so I can come back and visit London and Edinburgh for an affordable price.