British Pound Slides To Record Low Against US Dollar

September 26, 2022 Britain, Business

Reuters reports:

Sterling crashed to a record low early on Monday as traders rushed for the exits on mounting concern that the new government’s economic plan will stretch Britain’s finances to the limit. The British pound’s searing drop helped lift the safe-haven U.S. dollar to a new two-decade peak against a basket of major currencies, while the euro hit a fresh two-decade low against the greenback. But it was sterling’s slide that rippled across markets, down as much as 4.9% to an all-time low of $1.0327.

The BBC reports:

If the pound stays at this low level against the dollar, imports of commodities priced in dollars, including oil and gas, will be more costly. Other imported goods could also become considerably more expensive, further pushing up inflation which is already at its highest rate for decades. There are also concerns that the government’s plans to cut taxes and borrow billions will stoke high inflation and force the Bank of England to raise interest rates even further.

The New York Times reports:



As the euro has fallen below parity with the dollar and the British pound plunges toward a one-for-one exchange rate as well, another currency is also weakening against the dollar: China’s renminbi. For Shanghai trading on Monday morning, China’s central bank, the People’s Bank of China, fixed the initial value of the renminbi at more than 7 to the dollar for the first time in more than two years. It was the weakest fixing of the Chinese currency since July 2020.

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