Personally, with further QE in the system and the possibility of further monetary stimulus we could see further devaluationIt all gets a bit irritating particularly when the reality is so easy to determine via the excellent Oanda historical forex prices site - which neatly shows the rate movements in percentage terms.
Here's the GBP rate during the initial Asset Purchase period (11 Mar 2009 to 26 Jan 2010) when according to the know-all wags and their money multiplier fantasies there were billions of new pounds desperate to flee the country.
|GBP Forex % change during initial Asset Purchase period 11 Mar 2009 to 26 Jan 2010|
Even more amusing is what happens after the Asset Purchase programme was suspended.
|GBP Forex % change during Asset Purchase suspended period 27 Jan 2010 to 6th Oct 2011|
Clearly the foreign exchange relationship is much more complicated than simply interest rates and quantities of financial assets. There is a whole host of variables here defining a dynamic relationship that defies simple gut reaction analysis. It's complicated.
There is no evidence that the Asset Purchase function has caused any devaluation of Sterling. Another myth to file in the 'Neat, Plausible and Wrong' category.