Pound slumps to all-time low against dollar
(FASTNEWS | COLOMBO) – The pound has fallen to its lowest level against the US dollar since decimalisation in 1971.
In early Asia trade, sterling fell by more than 4% to $1.0327 before regaining some ground to around $1.05.
That came after UK Chancellor Kwasi Kwarteng unveiled historic tax cuts funded by huge increases in borrowing.
The pound has also been under pressure as the dollar has been boosted by the US central bank continuing to raise interest rates.
The euro also touched a fresh 20-year-low against the dollar in morning Asia trade amid investor concerns about the risk of recession as winter approaches with no sign of an end to the energy crisis or the war in Ukraine.
Peter Escho, the co-founder of investment firm Wealthi, said: “All currencies are getting sold off against the US dollar, so there is a large element of US dollar strength. But with the pound, it has really been exacerbated by news that the new government will be cutting taxes, which is inflationary.