Pound slumps to all-time low against dollar

[webfact]

 

By Monica Miller & Peter Hoskins

The pound has fallen to a record low against the dollar as markets react to the UK's biggest tax cuts in 50 years.

 

In early Asia trade, sterling slipped just below $1.04 - the lowest level since decimalisation in 1971 - before regaining some ground to about $1.05.

 

That came after Chancellor Kwasi Kwarteng unveiled historic tax cuts funded by huge increases in borrowing.

 

Full story: https://www.bbc.com/news/business-63030208

 

-- © Copyright BBC 2022-09-26

[OneMoreFarang]

That is what happens if a PM is selected by only 160,000 people.

 

Just one of those links with more details.

https://inews.co.uk/news/tory-leadership-contest-vote-who-can-how-many-conservative-members-full-voting-timetable-1752096

 

[hello55060]

That's what happens when you get idiots incharge who think a tax cut is a great way to solve the recession. Especially when the dollar is already so strong. Let's see what the governments next brilliant idea is. 

[placeholder]

It's also fallen to below 40 against the Baht.

[strikingsunset]

Hopefully there is - in every cloud there is a silver lining- I am returning to live in England next May,

then I,ll be 68 so UK Interest rates will have doubled by then, so will probably buy an annuity after 15 years  of very low interest/annuity rates.

 

[itsari]

Parity with the euro is on the cards  and the US dollar is a certainty .

Take the inflation in account then the UK pensionists in Thailand will be hit hard .

 

[keithkarmann]

1 hour ago, placeholder said:

It's also fallen to below 40 against the Baht.

If it gets down to 35baht then that will start to make things problematic for me. Probably a lot of UK expats will have similar problems. When I started living here 11 years ago it was 55 baht to the £. How things have changed since then.

[ourmanflint]

Some people have made million if not billions shorting the pound after govt gave hedge fund managers advanced warning of their plans last week. The most corrupt govt we have ever seen and they've only been in power 20 days

Edited September 26, 2022 by ourmanflint

[new2here]

It kind of feels like the GBP is oversold against the greenback.. i bought a block at 1.0722 so i think i’m in at a decent level.  While the graphs seems to show it falling through a support level, i do think it’s perhaps a bit oversold, so i’m pretty happy with going long at 1.0722 at this point.  

 

im not a really a forex trader but might do small block trades from time to time and only with the larger currencies that have higher trading volumes. 

[Harveyboy]

just a Question would now be a good time to buy sterling with euros i have both in my else accounts 

[Bangkok Barry]

4 hours ago, placeholder said:

It's also fallen to below 40 against the Baht.

That's nothing new. It was around 38 only a year or two ago. If it goes below 30 I'll start worrying.

[mrfill]

3 hours ago, strikingsunset said:

Hopefully there is - in every cloud there is a silver lining- I am returning to live in England next May,

then I,ll be 68 so UK Interest rates will have doubled by then, so will probably buy an annuity after 15 years  of very low interest/annuity rates.

 

I suppose that getting a few percent more on the annuity will help stave off the 15%+ inflation a bit.

[Mac Mickmanus]

2 hours ago, ourmanflint said:

Some people have made million if not billions shorting the pound after govt gave hedge fund managers advanced warning of their plans last week. The most corrupt govt we have ever seen and they've only been in power 20 days

Wouldn't that be illegal ?

Do you have some evidence to back that claim up ?

[OneMoreFarang]

6 hours ago, hello55060 said:

That's what happens when you get idiots incharge who think a tax cut is a great way to solve the recession. Especially when the dollar is already so strong. Let's see what the governments next brilliant idea is. 

I think you make the mistake that you think that they actually think the tax cut is a way to solve the recession.

That is what they say and what they tell the pubic it is the reason for their action. But is it?

IMHO Truss and others wanted to reduce the tax for their sponsors and friends. But obviously they couldn't just tell the public that that is the reason for their action. So they made up some kind of reason which could somehow be interpreted to make sense.

Or in other words: politics like usual.

[baboon]

It is now plain for all to see that Britain's mortal enemies are not Xi or Putin, but our own government. Tory voters, give yourselves a round of applause.

[placeholder]

Just now, baboon said:

It is now plain for all to see that Britain's mortal enemies are not Xi or Putin, but our own government. Tory voters, give yourselves a round of applause.

Well, according to what I've read, the average member of the Conservative Party who got to vote on Johnson's replacement, is far wealthier than the average citizen. So maybe they should give themselves a round of applause and a pat on the back.

[Gottfrid]

That´s what you would expect from a country that have lost all competence, and not have much to offer no more. Also, do they put pure masterminds at work leading the country. Cooking a recipe for disaster. But, on the other hand. Maybe time to come down from high horses and accept that we are just talking about a mediocre country as many others in the world. But, right now it looks like India have better online support people that could run the country. ????

[Thingamabob]

The Tory party have barely 2 years to recover. Failure to do so and they will most likely lose the next election. If that happens I just hope it's a clear Labour win without the need for a coalition with the SNP or the Lib Dems, or both.

[dunroaming]

4 hours ago, Harveyboy said:

just a Question would now be a good time to buy sterling with euros i have both in my else accounts 

Short answer would be yes, but I think the pound could well fall further. I moved my business base to Europe when Brexit was announced, whilst still living in the UK.  I therefore trade predominantly in Euros with a sterling option.

 

The situation in UK is dire and with these charlatans in charge will only get worse in the short term.  I have been a Conservative all of my life but last time voted Lib Dem.  No general election in sight so the present government will milk it as much as they can until they get kicked out!

 

So, I will wait for now but keep as much of my profits in Euros as I can, until I see where Britain and the pound are going to end up.

[James105]

7 hours ago, hello55060 said:

That's what happens when you get idiots incharge who think a tax cut is a great way to solve the recession. Especially when the dollar is already so strong. Let's see what the governments next brilliant idea is. 

Weird how people on here think that the £50bn tax cuts are the sole cause of this (even though the idea of tax cuts is to promote growth and it is too early to tell if that will actually happen), and not the additional £200bn of borrowing that is required to help people with their skyrocketing energy bills.  

 

The £200bn borrowing is not investing to grow the economy and it's just the kind of borrowing that causes markets to react just like they have done here.   

 

I can presume those on the left would prefer the alternative option of letting people freeze to death as they cannot afford their bills so the pound remains a little bit stronger against the $, unlike those nasty tories who only look after the rich folks.  

[realfunster]

A warm "good evening" to the Islington brigade, who appear to be out in force using this issue as a stick with which to beat the current Tory government.

 

Whatever you think of the Tories, Labour haven't had a serious chance of winning a general election since Blair went...it's simply easier to be a virtuous sideline whinger and not have to deal with the realities and practicalities of government.

 

It's a shame Blair, as the most successful Labour leader of the last 50 years, ultimately left a tarnished legacy of himself and his party for the longer-term, which ironically, in cannibalistic fashion, was gleefully supported, rather than rebutted, by certain elements of the Labour Party.

 

After Milliband and Corbyn, Starmer is a step in the right direction to potentially make Labour electable, but a lot of work still to be done to get in power. As Blair realised 25 years ago, UK is now firmly an aspirational and "middle class" country, as reflected by an 8:3 election count in the Tories favour since 1979. All 3 Labour wins being under Blair.

 

You simply must appeal to this middle-class group, whom in particular, were alienated by Corbyn. The old "class war" politics from the 70s/80s and currently employed in the US, simply don't work with the modern UK electorate.

 

Until Labour can present a serious, credible and electable alternative government, gripes about the Tories are just background noise...

 

 

Edited September 26, 2022 by realfunster
Typo

[RayC]

1 hour ago, James105 said:

Weird how people on here think that the £50bn tax cuts are the sole cause of this (even though the idea of tax cuts is to promote growth and it is too early to tell if that will actually happen), and not the additional £200bn of borrowing that is required to help people with their skyrocketing energy bills.  

 

The £200bn borrowing is not investing to grow the economy and it's just the kind of borrowing that causes markets to react just like they have done here.   

 

I can presume those on the left would prefer the alternative option of letting people freeze to death as they cannot afford their bills so the pound remains a little bit stronger against the $, unlike those nasty tories who only look after the rich folks.  

The updated energy price guarantee was announced early last week before the budget, and its' effects had been largely priced in by the markets. The subsequent falls in the FTSE indexes and in the pound - not just against the dollar but against most other major currencies - was almost entirely due to the measures announced in the budget.

 

According to the Institute of Fiscal Studies abolishing the 45% tax band will cost the Exchequer £6bn and benefit 600,000 (1.1% of the UK adult population) by an average of £22,000/year each. 

 

Traditional economic theory states that lower income groups spend more of any increased income than higher income groups (In Economics parlance the marginal propensity to consume decreases as income rises), therefore in order to stimulate growth the poorest - rather than the richest - individuals should be targeted e.g. by raising the tax allowance.

 

Truss and Kwarteng obviously reject this orthodoxy. All Brits had best hope that they are right, otherwise we will return to the dog days of the 1970s.

 

(Bolding  unintentional)

Edited September 26, 2022 by RayC
Addendum

[baboon]

56 minutes ago, realfunster said:

Until Labour can present a serious, credible and electable alternative government, gripes about the Tories are just background noise...

Not borrowing billions to give to people who don't need it would be a good start.

[pegman]

10 hours ago, Harveyboy said:

just a Question would now be a good time to buy sterling with euros i have both in my else accounts 

 The Chancellor of the Exchequer has stated he will be doubling down with more  borrowing to give tax cuts to the super rich so I would be careful. 

[whereyougo]

13 hours ago, new2here said:

It kind of feels like the GBP is oversold against the greenback.. i bought a block at 1.0722 so i think i’m in at a decent level.  While the graphs seems to show it falling through a support level, i do think it’s perhaps a bit oversold, so i’m pretty happy with going long at 1.0722 at this point.  

 

im not a really a forex trader but might do small block trades from time to time and only with the larger currencies that have higher trading volumes. 

Catching falling knives. Better wait for support and an up tick. Less profit but better safe than sorry

[Phil1964]

15 hours ago, OneMoreFarang said:

That is what happens if a PM is selected by only 160,000 people.

 

Just one of those links with more details.

https://inews.co.uk/news/tory-leadership-contest-vote-who-can-how-many-conservative-members-full-voting-timetable-1752096

 

Truss was elected by 88,114 people.

Now she has just rewarded them for their crosses on the ballot paper, by giving them a massive tax cut in exchange and while stiffing the rest of us in this fast declining country.

 

[Mac Mickmanus]

44 minutes ago, Phil1964 said:

Truss was elected by 88,114 people.

Now she has just rewarded them for their crosses on the ballot paper, by giving them a massive tax cut in exchange and while stiffing the rest of us in this fast declining country.

 

Shocking , giving a tax cut just to 88 114 people and not giving a tax cut to anyone else .

   How did she legally manage to get that measure passed ?

[RayC]

21 minutes ago, Mac Mickmanus said:

Shocking , giving a tax cut just to 88 114 people and not giving a tax cut to anyone else .

   How did she legally manage to get that measure passed ?

Because it's not against the law and her government has a majority in parliament.

[Mac Mickmanus]

1 hour ago, RayC said:

Because it's not against the law and her government has a majority in parliament.

OK, I didn't realise the government could give different tax rates to individual people 

[hotchilli]

18 hours ago, webfact said:

In early Asia trade, sterling slipped just below $1.04 - the lowest level since decimalisation in 1971 - before regaining some ground to about $1.05.

I can remember when when you got $2 to the pound.