The pound touched a new 37 year low against the dollar during early Thursday trading, as the divergence between the two currencies is becoming clearer. The Federal Reserve’s decision to hike rates by 75 basis points may have already been baked into the value of the dollar but still the currency rose. The markets readjusted expectations to accommodate further increases in US rates, which will also be likely to stay in place for longer. Meanwhile, on the other side of the Atlantic, the pound languishes, despite it being widely assumed that the Bank of England will later today announce a rate hike of 75 basis points.
The BoE’s own predictions point to an incoming recession, while the government is having to borrow enormous amounts in order to mitigate the effects of a devastating rise in the country’s cost of living. Looking ahead, despite the shift to a more hawkish stance by the central bank, the pound is likely to remain under pressure because of the country’s downgraded economic prospects.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.