Weak pound doesn’t bode well for U.S.

TEXT OF STORY

Steve Chiotakis: The British pound is still under pressure on the foreign exchange markets this morning. And that’s bad news for the United States. Marketplace Europe correspondent, Stephen Beard,
reports from London.

Stephen Beard: Political fears are dragging down the British pound. The U.K.’s looming general election is the source of concern; an indecisive result would leave the government unable to tackle Britain’s soaring budget deficit.

This is not good for the U.S. As the pound wilts and the euro also weakens, the dollar is riding high. Normally a good sign. But as the U.S. economy recovers, this is just what the U.S. doesn’t need, says Andrew Hilton, head of the CSFI think tank:

Andrew Hilton: The best thing that could happen to the U.S. economy is for the dollar to tank a little bit. It would make American exports in world markets more competitive and it would discourage Americans from buying Japanese cars or Korean cars or whatever they buy.

But as the dollar rises, making foreign goods cheaper in the U.S., British and other foreign exporters are rejoicing.

In London, this is Stephen Beard for Marketplace.