Europe Currencies Continue to Plunge

November 14, 2008 · Posted in Economy 

Royal Bank of ScotlandLast few weeks were chaotic for the stock market in the world as I wrote about Keeping Track with Global Currency Drift just earlier this week.

This morning’s news has reported that the Royal Bank of Scotland (RBS) will be cutting about 3,000 jobs in the next few weeks, as part of cost-saving measures to save the company from the economic downturn. Analysts have predicted a first annual loss this year for RBS. With at least £5bn coming from the government, it hopes to raise £20bn to bail-out the company from the situation.

So what does it affect me, especially one who holds a foreign currency (Singapore Dollars). The market is driving people and investors away; yet at the same time encourages black market to emerge. Simply take a look at the currency conversion rate between British Pound and Singapore Dollars below:

British Pound against Singapore Dollars on November 14

British Pound continues to weaken and it seems that over the last few days, the situation looks even worse. Something suggests that a lot has to do with the UK banking system featuring losses this year. For the first time, it has hit below 2.3 against Singapore Dollars!

Furthermore, below is the graphical trend of Euro against Singapore Dollars:

Euro against Singapore Dollars on November 14

Similarly, the situation can be said for the Euro, but it is not as bad as the British Pound. It remains fluctuating about 1.9 (against Singapore Dollars). It was highly speculated that the stability might have something to do with the unified currency system across Europe. Without that system, Euro may not withstand the global effect.

Even the conversion between British Pound and Euro does not look favourable for the Great Britain.

British Pound against Euro on November 14

Looks like Euro has stabilise, whilst British pound faces an uphill task to drive the economy upwards. It seems that it will take much longer time for the British economy to recover than expected timeframe analysed by financial experts. If this continues, the value of the British pound and Euro will soon equalise.

My speculation is that, if the outcome looks bleak for GBP, chances of the currency mergence for UK to join Europe may be realised soon – an effort to co-join the European Union in using one currency system, as well as to prevent further depreciation of the British Pound.

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