The UK is highly exposed to gas prices and inflation and the pound has been on the back-foot since mid 2021.
The pound hit a 3-Year LOW in mid May near 1.22 against the greenback (1 USD = 0.81 GBP) — on the bleak outlook for the UK economy and after the Federal Reserve started its long anticipated increase of interest rates.
Also hanging over the head of the pound is the thread of a EU-UK trade war over Brexit.
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In mid May the GBP/USD exchange rate dropped below 1.22 after the Federal Reserve raised interest rates combined with the continuing impact of the Ukraine war on commodity prices.
The UK central bank raised rates by 25bps contrasting with the rate hike of 50bps by the US Federal Reserve. In conclusion, the BoE’s (UK bank) gloomy economic forecasts increased pressure on Sterling.
The BoE’s (UK central bank) gloomy economic forecasts has increased pressure on Sterling. In early May the pound plummeted when the BoE raised rates by just 25bps contrasting with the rate hike of 50bps by the US Federal Reserve.
In February and March the GBP/AUD exchange rate dropped on the impact of the Ukraine situation on commodity prices — this was good for AUD and bad for GBP.
During April and May the pound-aussie rate improved back towards 1.78, but as we move through 2022 the prospect of more Australian interest rate rises sooner than expected could also boost the Aussie dollar vs Sterling.
The Ukrainian crisis and the risk-off market for European energy supplies have pushed the Canadian dollar down against the Rupee.
At the end of the January the CAD/INR exchange rate was heading towards the 59 mark down from its highs around 61 in October last year.
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