Should We Be Wary of the Pound, Which Has Fallen Below 1.1 Dollars Per Pound as the Sell-Off Continues?
26.09.2022
- Chicago Fed National Activity Index
- Remarks by Tenreiro, a Member of the MPC in the UK
Last weekend, the U.S. dollar continued to strengthen as the Dollar Index rose to 113.9, causing the EUR/USD pair to fall 180 pips from 0.9850 to 0.9667.The EUR/USD pair continued to decline during today’s Asian trading session, touching 0.9552. The string of new lows shows no signs of stopping. Despite remarks by German Bundesbank President Nagel that “the ECB needs to raise interest rates again, even if it harms economic growth,” the pair has been unable to withstand the strength of the U.S. dollar.
Among European currencies, the pound plummeted against both the yen and the U.S. dollar. Following the announcement last weekend of the Truss administration’s major tax cut plan, the yield on 10-year British government bonds rose to 3.8%.The GBP/USD exchange rate fell from 1.1271 to 1.0836. Furthermore, during today’s Asian trading session, it plummeted by 500 pips, touching 1.0304. Parity—one pound to one U.S. dollar—is now looking increasingly likely.
Today, at 4:00 p.m., the Turkish Economic Sentiment Index and remarks by Nagel, President of the German Federal Bank; at 5:00 p.m., the GermanIFO Business Climate Index, at 9:30 p.m. the U.S. Chicago Fed National Activity Index, at 10:00 p.m. remarks by ECB President Lagarde, at 11:00 p.m. remarks by U.S. Federal Reserve Bank of Boston President Collins:Boston Fed President, at 11:30 PM: U.S. Dallas Fed Manufacturing Activity Index, at 1:00 AM: U.K. MPC Member Tenreyro’s remarks, U.S. Atlanta Fed President Bostic’s remarks, at 1:30 AM: U.S. Logan:President of the Dallas Fed, at 26:00: U.S. 2-year Treasury auction, at 27:35: New Zealand – RBNZ Governor O’Hara’s remarks, and at 29:00: U.S. – Mester, President of the Cleveland Fed, is scheduled to speak.With the sell-off in the pound showing no signs of stopping, we will be paying close attention to the remarks by UK MPC Member Tenreiro.
Author: Keisuke Sakurai
