11/10/2022 – Exchange Rates

  • Posted by currencies in Rate Alerts
  • October 11, 2022
  • No Comments

The pound weakened for the fifth day in a row amid fresh signs of trouble in the UK government bond market that forced yet another intervention by the Bank of England.

The pound currently stands at $1.10 after recovering slightly to $1.14 last week, following Kwasi Kwarteng’s U-turn on the abolition of the 45 percent tax rate.

The pound extended recent declines, falling 0.3%, even as data showed Britain’s unemployment rate fell to 3.5% in the three months to August, the lowest since 1974.

However, the Office for National Statistics (ONS) revealed that UK workers have suffered an almost 3% hit to real wages owing to increasing inflation. Further negative economic updates could put further pressure on the sterling as it’s under focus after such a volatile few week of trading.

If the government fails to fully restore investor confidence quickly, the likelihood of another sharp sell-off for the pound will increase.

The real battle remains against inflation … however the sharp decline in the pound in the past month against the US dollar has done enormous damage to that battle given that we were at $1.1600 this time a month ago and are now well below that.

After the chancellor announced his budget on September 23, the pound briefly fell to $1.03, the lowest level ever recorded.

The BoE’s latest move follows Monday’s launch of a new short-term funding facility to avoid a “cliff edge” when the central bank’s £65bn emergency bond-buying programme ends this week.

British gilt yields also fell in early trade with 10-year bond yields down 8 basis points at 4.41%. The 10-year inflation-linked bond yield was down almost 20 bps at around 1.16%.

GBP/EUR 1.11374 GBP/USD 1.1029 GBP/AED 4.0432
GBP/AUD 1.7647  GBP/CHF 1.1020 GBP/CAD 1.5270
GBP/NZD 1.9800  EUR/USD 0.9701 GBP/ZAR 20.068

Leave a Reply

Your email address will not be published.

What's Going On?

Currencies 4 You Ltd is a company registered in England and Wales (registered no. 06866898). Registered office: Regus House Victory Way Admirals Park, Crossway, Dartford, Kent, DA2 6QD. Currencies 4 You Ltd Payment and Foreign Currency Exchange Services are provided by Currency Cloud Limited and Equals Connect Limited. Currency Cloud Limited. Registered in England No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money. FCA registration number: 900199. Payment Services are provided by Equals Connect Limited, registered in England and Wales (registered no. 07131446). Registered Office: Vintners’ Place, 68 Upper Thames St, London, EC4V 3BJ. Equals Connect Limited are authorised by the Financial Conduct Authority to provide payment services (FRN: 671508). Payment services for Currencies 4 You Ltd are provided by Sciopay Ltd. Sciopay Ltd is a company incorporated in England & Wales. Registration No: 12352935. Sciopay Ltd is licensed and regulated by HMRC as a Money Service Business (MSB). Licence No: XCML00000151326. Sciopay Ltd is authorised by the Financial Conduct Authority as an Authorised Payment Institution. Firm Reference Number: 927951. | Terms and Conditions | Privacy Statement | Careers