The British Pound Falls Strongly
After what most market commentators perceive as an awful week for the UK economy, the Pound Sterling crashed around 10% overnight, before climbing back to around 5% down versus the US dollar.
The cause of this mayhem was the Bank of England raised interest rates by half a percentage point, seen as too little too late, and the UK government cutting taxes in an inflationary environment!
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The British Pound Falls Strongly after BOE Rate Increase Disappoints the Markets
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After what most market commentators perceive as an awful week for the UK economy, the Pound Sterling crashed around 10% overnight, before climbing back to around 5% down versus the US dollar.
The cause of this mayhem was the Bank of England raised interest rates by half a percentage point, seen as too little too late, and the UK government cutting taxes in an inflationary environment!
The US dollar is surging against not only the Pound Sterling, but also the Euro, Yuan, and Yen.
The US dollar (DXY) index is at 114, and seemingly headed inexorably higher, with many thinking it will reach at least 120 in the current run, and possibly quite soon.
The dollar is the current safe haven, and not gold, due to rising rates.
Needless to say, there is enormous pressure on mining stock prices on both Australia and Canada. UK based investors should bear in mind that their Aussie and Canadian stocks may be falling, but they are gaining a currency advantage as the pound falls.
This currency gain will not completely compensate for falling stock values, but will at least partially offset the losses.
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.If you need clarification of any information contained in this note, or have any questions, I will be delighted to assist – Please email andrew@city-investors-circle.com
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This website is not sponsored, we are truly independent, and will always remain so.
Companies featured here have either presented to the Circle in London, or have been selected because they are considered to have interesting projects, in good jurisdictions, run by an experienced management team.
All information used in the preparation of this communication has been compiled from publicly available sources that we believe to be accurate and reliable, however, we cannot, and do not, guarantee the accuracy or completeness of this.
These articles are for awareness and informational purposes only, and are not recommendations in any form. Always consult an investment professional.
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