Britain’s pound is beating every other major currency this year
London
Cnn
–
British Pound One low advertisement In the autumn, investors rebelled against the budget plans of former Prime Minister Liz Truss. Now, it is enjoying the return.
Sterling reached its highest level against the US dollar on Tuesday, 10 months and has reached $ 1.25 for the first time since June 2022. Pound has been advancing about 3.3% against Greenback since the beginning of 2023.
The British currency was increased with indicators that the country’s economy is better than expected. The event is thought to expand 0.1% in the last three months of last year, from a previous growth prediction. It is estimated that the growth of gross domestic product in January was 0.3% after falling by 0.5% in December.
This flexibility supports the expectations of the UK Bank that it will maintain aggressive interest rate hikes despite its concerns about the health of the global banking sector. Rising rates can increase the local currency as they help withdraw the withdrawal of foreign investors looking for higher return.
Inflation is also in the United Kingdom It increased by 10.4% annually in FebruaryIt underlines the need to maintain the difficult approach of the Bank of the UK.
After explaining the Truss government’s plans to increase borrowing while cutting taxes, the Pound approached $ 1.03 in September 2022, after explaining plans to reveal panic in financial markets in the United Kingdom.
The International Monetary Fund predicted that the UK economy would make a contract at a rate of 0.6% this year, and all other advanced economies would grow a little.
“Pound had a lot of pessimism, France said a currency strategist Strategist Francesco Pazol, Ing.
However, energy prices and sharp retreat at China’s re -opening have provided some relief about the economic appearance since the beginning of the year.
“There was a great degree of growth expectations throughout Europe, and this affected England, Pes said Pesole.
The euro was removed by these dynamics by increasing 2.3% against the US dollar in 2023. Pound’s rally was largely sharper because the decrease of 2022 was more violent than pesol.
Both currencies helped Greenback’s sharp decline from the heights reached last September because the fears of stagnation in the United States were filtered.
The lack of clarity around the next steps of the Federal Reserve has also restricted the dollar in recent weeks. The investor speculation increased that the FED could pause or stop ratio increases due to concerns about the economy after the failure of Silicon Valley Bank last month.
Jordan Rochester, a currency strategist in Nomura, said the pound could rise to $ 1.30 this year and think that it might be “potentially higher”. However, considering how the uncertainty and ratio increases surrounding the plans of the UK Bank will withdraw in the country’s economy, it is still risky. And Pesole warned that when the markets are wavy, the currency fluctuations are often exaggerated as they are now.
“In a variable market environment, movements are getting worse,” he said.
