Great Britain Pound Drops in Forex Trading

October 10, 2008

Sterling savaged on the FX marketAs the financial crisis continues, and investors give in to panic, things are getting hairy in all the financial markets. On top of the issue surrounding the economy, though, things are further being complicated by the dispute between the U.K. and Iceland with regard to financial assets.

Bloomberg offers a look at the charges flying on both sides of the snafu:

Brown said Iceland is failing to honor its guarantee to cover overseas savers on accounts that it usually backs up to 20,887 euros ($28,400), leaving Britain to pick up the tab. Iceland’s Prime Minister Geir Haarde said the U.K. government is to blame for triggering the crisis when it used anti-terrorism laws to seize the assets of Icelandic banks in the U.K.

The sterling is dropping on the FX market against the euro, dollar and the yen.