Business views Corbyn’s appointment as taxing
The main point of interest over the weekend was, from the announcement that Jeremy Corbyn MP had been elected the new Labour party leader. Corbyn’s anti-austerity, anti-trident policies echo those of the Scottish National Party which enjoyed tremendous success in May’s UK General Election, Corbyn’s ascension to the leadership greatly increases the chances that the UK will drop its anti-austerity path at some stage during the next five years.
Analysts forecast that the prospect of such an outcome will provide the Pound Sterling with a considerable headwind in the medium-to-long term, potentially sending the Pound Sterling US Dollar exchange rate back down to levels not seen since 2009.
As market participants are putting the turmoil of August behind them, indicating that the world’s markets have pacified as policy makers stateside contemplate raising interest rates for the first time since 2006.
The Fed’s meeting due on Sept. 16-17, market participants are squaring out of positions taken out in last month’s market flight. Commodity currencies such as the NZD and ZAR, among the major losers after of the yuan devaluation on Aug. 11.
Settling instability may give Fed administrators added assurance as they deliberate on raising their benchmark rate from the same levels since 2008. Policy makers have signalled that they’re watching the market in the lead -up to the meeting. Market participants do not seem to have started to ramp up wagers that the central bank will increase interest rates this month. With many market participants leaning toward the Fed keeping rates on hold.