The British currency fell because of concerns about the economic plan of the country’s new government, and the EU currency – because of the energy crisis.
The pound sterling on Monday, September 26, fell to a record low. The euro also hit a new 20-year low against the dollar. This was reported by Reuters.
The reason for the fall of the pound lies in traders’ fears that the economic plan of the new UK government will create tension in the financial sector. As for the euro, it hit a new 20-year low against the dollar on fears of a recession due to energy crises amid the escalating war in Ukraine.
The publication notes that the British pound’s rapid fall helped the US dollar hit a new two-decade high against a basket of major currencies.
The pound fell 4.9% to an all-time low of $1.0327 before stabilizing near $1.05425, down 2.9% from the previous session’s close.
The dollar index, whose basket includes the pound sterling, euro and yen, hit 114.58 for the first time since May 2002. It then fell to 114.02, up 0.78% at the end of last week.
Saktiandi Supaat, regional head of research and foreign exchange strategy at Maybank, said the strength of the dollar is mainly due to the strong sell-off in the pound sterling.
Remember that in Ukraine the dollar continues to grow in the cash market. In particular, on September 21, the Hryvnia exchange rate reached 42.8 per dollar.
As you know, in May this year, the IMF increased the weight of the dollar and the yuan in the SDR basket.
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Source: korrespondent
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