In Japan, authorities reiterated their willingness to respond to speculative moves in the currency, after they intervened last week to prop up the yen for the first time since 1998.
howeverIt was the drop in the British pound that spread across the markets, as it fell 4.9% to a record low of $1.0327. The coin regained ground during the London session, but fell 1.5% to $1.0689.
The pound had already fallen 3.6% on Friday, when new Finance Minister Kwasi Quarting unveiled historic tax cuts funded by the largest increase in borrowing since 1972. On Sunday, the official dismissed the currency’s free fall, stating that his strategy was to focus more on long-term growth.
Sterling was also down 1% against the euro, after hitting its lowest level since September 2020 at 92.60 pence. The euro also hit a 20-year low against the dollar, trading at $0.9528, down 0.5%.
The dollar rose 0.52 percent to 144.09 yen, close to a 24-year high hit on Thursday., from 145.90. On the same day it fell to 140.31 after Japan intervened to buy the yen for the first time in more than 20 years. The dollar index, which measures the US currency against a basket of major currencies, hit 114.58 for the first time since May 2002.
“The focus is on the British pound, but the dollar story is much bigger and that’s the part that doesn’t help,” said Sima Shah, chief strategist at Principal Global Investors. The offshore Chinese yuan fell to 7.1728 per dollar, the weakest level since May 2020.
