After a record low fall of the pound sterling against the dollar to $1.035, traders expect further depreciation of the British currency, writes Bloomberg.
On Tuesday, September 27, the pound jumped 0.9% to 1.0789 after losing 6.5% over the past five days. The UK currency was worth around $1.4 in mid-2021 and two dollars in 2008. The last time the pound was close to one dollar was in 1985.
“I think the situation is only going to get worse, unfortunately. I don’t want it to get worse. I make my money in this particular country,” the publication quotes Nomura International investment strategist Jordan Rochester as saying.
The agency notes that until last week, the pound was already under pressure from a steady rise in the dollar, partly because high energy prices were increasing Britain’s trade deficit and rising Federal Reserve rates were drawing funds into the US. The fall intensified after the new Prime Minister Liz Truss’s government unveiled plans for sweeping tax cuts in the face of slowing economic growth.