The pound fell to a 14-month low

The pound fell to its lowest level since late 2023 on Jan. 9, weighed down by a global bond selloff that pushed UK government borrowing costs to their highest level in 16 years, once again -concerns about Britain’s finances. Reuters writes about it.

As noted, sterling was last down 0.6% at $1.2295, hitting its lowest level since November 2023, while the cost of hedging against big price swings next month jumped to its highest level since the crisis in banking in March 2023.

Global bond yields rose this week amid concerns about rising inflation, shrinking chances of an interest rate cut, uncertainty over how US President-elect Donald Trump will advance foreign policy or economic, and the prospect of trillions of dollars in additional debt.

In the UK, the 10-year gilt yield rose a quarter point just this week to its highest level since 2008 as confidence in Britain’s fiscal outlook worsened.

Sterling has been one of the best performing currencies against the dollar over the past few years, thanks in large part to the Bank of England’s policy of holding UK interest rates longer than other major central banks. bank, thereby encouraging foreign investors to earn interest on British assets.

It is noted that Trump’s proposed policies on trade tariffs and immigration carry the risk of increasing price pressures in the United States, limiting the Federal Reserve’s ability to cut rates, leading to rapid increases in dollar against almost all other currencies.

It was earlier reported that India’s currency, the rupee, was falling to historic lows due to perceived capital flight and weakness in Asian currencies.

Let us remind you that the hryvnia exchange rate continues to fall against the dollar in the cash market. The American currency is approaching the 43 hryvnia mark.