Against the backdrop of a strengthening US currency, the euro and pound sterling fell, as did the Chinese yuan.
Volatility in financial markets pushed the US dollar index to a new high in two decades. Reuters reported this on September 28.
At the same time, the pound sterling fell to near-historic lows on fears of plans for sweeping tax cuts in Britain.
The US dollar index rose about 0.5% against a basket of major currencies to a new high of 114.78, helped by a similarly sustained rise in US 10-year Treasury yields. They rose to 4% for the first time since 2010.
At the same time, the euro fell 0.43% to $0.956, the pound sterling fell 0.7% to $1.0678, and the Australian dollar, which is particularly sensitive to changes in investor sentiment, fell 1%.
It noted that rising global interest rates have fueled recession concerns, driving up bond yields around the world.
However, the increase of the dollar against the pound is also driven by the British domestic factor – last week the British government announced a plan to reduce taxes and increase borrowing.
This sent the pound down to $1.0327 on Monday, a record low.
Bank of England chief economist Hugh Pill said the regulator was likely to provide a “politically significant response” to Treasury Secretary Kwasi Kwarteng’s ambitious tax cut plans.
A strengthening dollar pushed Asian currencies to multi-year lows as well. Thus, the Chinese yuan fell to 7.249 dollars, which is the lowest level since such data appeared in 2011.
Recall that on September 22, the US dollar index updated its maximum in 20 years at 111.72 after another increase in interest rates by the US Federal Reserve.
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Source: korrespondent
I am Dylan Hudson, a dedicated and experienced journalist in the news industry. I have been working for Buna Times, as an author since 2018. My expertise lies in covering sports sections of the website and providing readers with reliable information on current sporting events.