Though the British Pound has improved in price today, it has failed to do well in outlook. It made a new high in early Asia at 1.1205 before declining under 1.1100.
Yesterday, UK’s Prime Minster Liz Truss reiterated the decision to implement unfunded tax cuts, heightening pressure for a different direction for local and international markets. The GBP/USD is nearly back to its last week’s trading point before Chancellor of Exchequer Kwasi Kwarteng’s announcement.
Although it has been reported that some members of the conservative party do not support the announced plans, they, however, do not have the ability to do anything about it. These people believe that a leadership spill would cause the party to look uncoordinated, and a general election would not be a solution, following the low ratings on polls.
Hence, the Bank of England has been saddled responsible for sorting the rigmarole. The bank bought long-end bonds to stabilize financial conditions on Wednesday, which seems effective.
Some currencies also had a mellow start today, while CAD, NOK, AUD, and NZD are quite lower.
The USD/JPY eyes off 145 yet again; the market keeps watching closely for a move at that point to see if the BoJ will intervene again.
Fed board members James Bullard, Mary Daly, and Loretta Mester signal that the Fed meeting will turn out in another rate hike as they have yet again maintained a hawkish stance and comments.
The Wall Street inclination spilled into APAC stocks and futures indicate a tough day for European and North American equity indices.