The British currency lost 1.10% to 1.1350 dollars around 1:10 p.m., following an intervention by Prime Minister Liz Truss. The euro loose its side 0.65% to 0.9921 dollar.
The pound nosedived once morest the dollar on Wednesday, ceasing to rebound like it had at the start of the week in a market picked up by risk aversion ahead of US jobs data.
The British currency lost 1.10% to 1.1350 dollars around 1:10 p.m., following an intervention by Prime Minister Liz Truss, who did not detail the major points of her controversial budgetary measures. These had caused the pound to plunge to its historic low once morest the greenback last week. The beginning of the week had been marked by concessions from the government, which had contributed to the rebound of the British currency.
But the market remains focused on the state of American employment: the American Federal Reserve (Fed) might see in less solid data in the United States the signal that its rate hikes weigh too much on economic activity. As a result, good employment figures would paradoxically be seen as a negative sign for the US market since they would push the Fed to continue raising rates rapidly, while a weakening would benefit stock markets and weigh on the dollar.
Before the official data on US unemployment on Friday, investors will look at the start of the European followingnoon on the ADP survey of job creations in the private sector for September in the United States. “That said, this theory (of slower Fed rate hikes) already seems to be losing ground” with Wednesday’s rise in the dollar, noted Rabobank analyst Jane Foley.
She points out that Fed officials showed themselves on Tuesday more determined than ever to raise their rates to curb inflation. And according to Ms Foley, “while it is clear that the euro zone is going to have a difficult winter, the euro has not fully priced in the energy price shock and the fact that it might last for several years” .
The euro, which had also rebounded once morest the dollar in recent sessions, lost 0.65% to 0.9921 dollars.
