Pound Sterling: Pound falls to 37-year low as poor retail sales fuel economic woes

LONDON- Facts pound on Friday fell to a 37-year low in the US dollarsand 17-month low above euroafter weaker-than-expected retail sales figures added to worries about the health of the UK economy.

The pound fell more than 1% against the dollar to 1.1351, its lowest level since 1985, its decline accelerated after it broke through a 37-year low last week.

The euro rose to a peak of 87.66 pence, its highest level since February 2021, and was last up 0.39% at 97.52 pence. The Office for National Statistics said on Friday retail volumes fell 1.6% month-on-month in August – the biggest drop since December 2021 and worse than all forecasts in the poll. The opinion of Reuters economists each pointed to a decrease of 0.5%.

But this is just the latest bad news for British Money.

John Hardy, head of FX strategy at Saxobank, said: “The backdrop of things going on is weighing heavily on the pound, with the UK running these large external deficits. and the risks surrounding the new prime minister’s policies have also increased.”

Britain’s new leader, Liz Truss, last week announced limits on skyrocketing consumer energy bills for two years to cushion the economic shock of the war in Ukraine with measures that could cost the country damage. up to 100 billion pounds ($115 billion).

British Finance Minister Kwasi Kwarteng will issue a financial statement this month explaining how the money will be funded, and is also expected to indicate how he will make the payments. tax cuts that Truss promised during her Conservative Party leadership campaign.

“Additionally, markets are ‘at risk’ after the Fedex withdrew its forecast and US stocks fell below key support. In the risk-on environment, the pound is like a bit like this,” Foley said. a worse euro”.

FedEx Corp on Thursday withdrew its financial forecast made just three months ago, sending its shares plunging and affecting the broader market.

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