Pound strengthens against dollar but Jim Rogers predicts further falls?
The pound rose sharply to regain some ground against the dollar on Monday after
falling to a 23-year low last week
By Angela Monaghan
Sterling jumped 2.7 cents to close at $1.3938. This compares with $1.3668 on
Friday - its lowest level since 1985. However, the currency is still far off
its early January level of more than $1.50.
The rise came as veteran investor Jim Rogers said the pound could approach
parity with the dollar in the coming years as the UK's national debt increases
and the economy can no longer rely on the City of London's financial centre and
North Sea oil supplies for a boost.
"I suspect it's going to make new lows - it may take a decade," he told
Reuters. "It's got near parity with the dollar before...why not again? There's
two big holes developing in the UK's balance of payments -- North Sea oil
drying up and the financial industry. I don't see anything replacing those two
big holes."
Last week Mr Rogers caused controversy when he said "the City of London is
finished" and advised investors to "sell any sterling you might have."
The comments prompted an open letter from two economists at The Royal Bank of
Scotland, in which they criticised his "Armageddon-esque vision of Britain" and
described Mr Rogers' line of argument as "lacking rigour."
Gordon Brown also reacted angrily, saying that policy would not be dictated by
"a few speculators who want to make money out of Britain."
However, in a letter to the Financial Times Mr Rogers said: "...I also note
Gordon Brown accused me of talking my own book. I made it crystal clear to
everyone last week that I have absolutely no position in anything in the UK
either long or short so whatever happens will not affect me at all."
The pound was also slightly stronger against the euro on Monday, but by less
than a cent with £1worth €1.0612.
Mr Rogers is best known for co-founding Quantum Fund with George Soros. He
moved to Singapore in 2007 after declaring that Asia and commodities held the
best investment potential. His latest comments came after he advised investors
to "sell any sterling you might have" last week and declared that "the City of
London is finished".
Mr Rogers' predictions came as the Conservatives said their research showed
that UK manufacturers were among the worst hit by the downturn compared with
European counterparts, with output down by almost 9pc in the year to November,
despite a weaker pound
