Whilst the pound saw some early gains yesterday as PM Truss took the reins, these have been given back since. Sterling now finds itself back in the $1.14 handle against the greenback and softer against the euro. The initial gains have been absorbed rapidly.
It will be a rocky road ahead for Truss which faces a multitude of issues, the largest being the cost-of-living crisis in the UK. The pound will react to any new policy moves but for now, it appears the small dose of positivity Truss provided has come to an end.
On the economic calendar today a rate decision from the Bank of Canada who is likely to opt for a 75 basis point rise. However, there’s a small chance this could be a 1% move. Other than that, it’s a quiet day. BoE members will testify in front of a Parliamentary Select Committee which may produce some excitement for sterling, however, do not hold your breath.
Written by Viv Savani. 8:08am, September 7th 2022
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