Sterling's losses reflect concerns over the structural effects of fiscal stimulus outlined in the U.K. government's mini-budget Friday. The stimulus could boost demand and temper recession fears, while it has also prompted the market to price in nearly a 100-basis-points interest-rate rise by the Bank of England in November. However, sterling's marked weakness suggests any cyclical support for the currency from the fiscal impulse is being outweighed by concerns over the sizeable burden these plans will put on government finances. - HSBC FX Strategy
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