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Sterling plummets to 8-month lows

Sterling plummets to 8-month lows

Sterling fell amid concerns over the surge in energy costs and supply difficulties, slumping to 8-month lows around 1.3525 while the Euro strengthened sharply to 1.1587.

New Bank of England MPC member Mann stated that inflation expectations rising to an 8-year high doesn’t faze her, leading markets to speculate that she wouldn’t be voting for rate hikes any time soon. There were further concerns surrounding the impact of energy costs.

There has been some stability this morning, but soaring energy costs and disruption and their effect on the economy is keeping confidence low. Sterling was held around 1.3550 against the dollar with the Euro around 1.1600.

In the US, Fed Chair Jerome Powell reiterated that the test for tapering bond purchases had all but been met. The dollar strengthened to 10-month highs as commodity currencies retreated sharply and there was also an element of month-end US demand. The Euro dipped to lows around 1.1670.

 

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