The UK is highly exposed to gas prices and inflation and the pound has been on the back-foot since the Russian invasion of Ukraine.
The pound hit an all-time low (since decimalization in 1971) in late September of 1.03 against the greenback (1 USD = 0.97 GBP) — reacting to the controversial tax-cutting policies from the new chancellor.
The outlook for sterling against most currencies over the winter remains extremely challenging in its precarious post-Brexit/Ukraine war economic environment.
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GBPUSD is down around 15 percent this year and hit an all-time low (since decimalisation in 1971) in late September of 1.03 (1 USD = 0.97 GBP) — reacting to the controversial tax-cutting policies from the previous (new) chancellor.
The Bank of England has joined the global fight against inflation, but has raised rates by less than the US Federal Reserve.
So it seems the BoE’s gloomy economic forecasts has increased pressure on Sterling.
In October, the GBP/EUR rate is still well down from the 1.20 levels, seen at the start of the year, to the 1.13-15 levels (1 EUR = 0.88 GBP).
This is some achievement given the Euro itself has been under heavy pressure itself from impact on gas prices by the war in Ukraine.
The BoE’s (UK central bank) gloomy economic forecasts has also increased pressure on Sterling.
In the first quarter 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.
Since then the pound to Aussie rate has fluctuated around the 1.76 level (1 AUD = 0.56 GBP), except for a drop to 1.60 when the market rejected the new UK chancellors controversial tax policies.
The Ukrainian crisis and the impact on energy prices have pushed the Canadian dollar up & down this year against the Rupee.
Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.