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Putin speech sends sterling to fresh 37-year low ahead of Fed, BoE meetings

Thursday, September 22, 2022
Putin speech sends sterling to fresh 37-year low ahead of Fed, BoE meetings © Reuters. FILE PHOTO: Pound and U.S. dollar banknotes are seen in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration

By Lucy Raitano

LONDON (Reuters) - The pound touched a new 37-year low against the dollar on Wednesday after Russian President Vladimir Putin's accusation of "nuclear blackmail" by the West boosted the safe-haven dollar.

An expected interest rate hike by the U.S Federal Reserve (Fed) later in the day played into market sentiment, with eyes also on a Bank of England rate decision and a new government mini-budget this week.

By 1143 GMT, the pound was down 0.31% against the dollar at $1.13460 pence, having earlier hit $1.13040 - its lowest since 1985.

"This morning’s dip is primarily a function of the Russia news. Sterling also generally trades in line with risk appetite which is one reason it has been so weak this year," Colin Asher, senior economist at Mizuho Corporate Bank, said.

The pound has lost 16% in value against the dollar so far this year, as fears of a global recession have mounted, alongside flaring geopolitical tensions and soaring inflation.

Sterling traders are looking ahead to an expected interest rate hike on Thursday by the Bank of England (BoE), which is struggling to protect the economy from a cost-of-living crisis, as well as the domestic fiscal policy implications of a planned mini-budget from the government of newly-installed Conservative Prime Minister Liz Truss.

"It’s a little bit tricky for the Bank of England because their current forecasting modus operandi suggests they will only take into account announced government policy," Asher said.

Money markets are fully pricing in a 75-basis point increase by the BoE, with a 50-basis point rise a more distant possibility, in the face of red-hot consumer inflation and slowing growth.

After Thursday's BoE meeting, new finance minister Kwasi Kwarteng will update parliament on his first "mini-budget" which will be aimed at supporting households and businesses through the coming winter and is likely to include tax cuts.

"There are concerns about the sustainability of such an expansionary fiscal policy, in tandem with the news of plans to cap energy bills, it's still a pretty bad combination for the pound at the moment because the market is not trusting that the measures are going to be effective or sustainable," said Francesco Pesole, FX strategist at ING.

Britain's budget deficit was bigger than expected in August, data published Wednesday showed, further bringing into focus the difficult financial backdrop in the UK..

The Office for National Statistics said public sector borrowing excluding state-owned banks stood at 11.82 billion pounds ($13.44 billion) last month. A Reuters poll of economists had pointed to borrowing of 8.45 billion pounds.

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03-10-2022 17:37:52 (UTC+7)

EUR/USD

0.9780

-0.0019 (-0.19%)

Summary

Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (3)

Sell (5)

EUR/USD

0.9780

-0.0019 (-0.19%)

Summary

Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (3)

Sell (5)

GBP/USD

1.1201

+0.0041 (+0.37%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (2)

Sell (7)

USD/JPY

145.07

+0.32 (+0.22%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (2)

Sell (8)

AUD/USD

0.6449

+0.0046 (+0.73%)

Summary

Neutral

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (3)

Sell (7)

USD/CAD

1.3759

-0.0067 (-0.48%)

Summary

↑ Sell

Moving Avg:

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Indicators:

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EUR/JPY

141.89

+0.05 (+0.04%)

Summary

↑ Sell

Moving Avg:

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Sell (9)

Indicators:

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EUR/CHF

0.9671

+0.0001 (+0.02%)

Summary

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Moving Avg:

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Gold Futures

1,672.35

+0.35 (+0.02%)

Summary

↑ Buy

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Silver Futures

19.387

+0.348 (+1.83%)

Summary

↑ Buy

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Copper Futures

3.3720

-0.0405 (-1.19%)

Summary

Neutral

Moving Avg:

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Indicators:

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Crude Oil WTI Futures

82.66

+3.17 (+3.99%)

Summary

↑ Sell

Moving Avg:

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Brent Oil Futures

88.42

+3.28 (+3.85%)

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↑ Sell

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Natural Gas Futures

6.622

-0.144 (-2.13%)

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US Coffee C Futures

220.18

-1.37 (-0.62%)

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Euro Stoxx 50

3,290.65

-27.55 (-0.83%)

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↑ Buy

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S&P 500

3,585.62

-54.85 (-1.51%)

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↑ Sell

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DAX

12,029.34

-85.02 (-0.70%)

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Buy

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FTSE 100

6,856.00

-37.81 (-0.55%)

Summary

↑ Buy

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Sell (0)

Hang Seng

17,079.51

-143.32 (-0.83%)

Summary

↑ Buy

Moving Avg:

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Sell (0)

Indicators:

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Sell (0)

US Small Cap 2000

1,667.27

-7.66 (-0.46%)

Summary

↑ Sell

Moving Avg:

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Sell (8)

Indicators:

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Sell (6)

IBEX 35

7,352.50

-14.30 (-0.19%)

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↑ Buy

Moving Avg:

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Sell (0)

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Sell (0)

BASF SE NA O.N.

40.167

+0.567 (+1.43%)

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↑ Buy

Moving Avg:

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Sell (0)

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Sell (0)

Bayer AG NA

47.52

+0.11 (+0.23%)

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↑ Sell

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Allianz SE VNA O.N.

160.04

-1.76 (-1.09%)

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↑ Buy

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Adidas AG

116.26

-2.62 (-2.20%)

Summary

↑ Buy

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Deutsche Lufthansa AG

5.579

-0.339 (-5.73%)

Summary

↑ Sell

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Siemens AG Class N

98.69

-2.51 (-2.48%)

Summary

↑ Buy

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Deutsche Bank AG

7.396

-0.250 (-3.27%)

Summary

↑ Buy

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Indicators:

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 EUR/USD0.9780Sell
 GBP/USD1.1201Sell
 USD/JPY145.07↑ Sell
 AUD/USD0.6449Neutral
 USD/CAD1.3759↑ Sell
 EUR/JPY141.89↑ Sell
 EUR/CHF0.9671↑ Sell
 Gold1,672.35↑ Buy
 Silver19.387↑ Buy
 Copper3.3720Neutral
 Crude Oil WTI82.66↑ Sell
 Brent Oil88.42↑ Sell
 Natural Gas6.622↑ Sell
 US Coffee C220.18↑ Sell
 Euro Stoxx 503,290.65↑ Buy
 S&P 5003,585.62↑ Sell
 DAX12,029.34Buy
 FTSE 1006,856.00↑ Buy
 Hang Seng17,079.51↑ Buy
 Small Cap 20001,667.27↑ Sell
 IBEX 357,352.50↑ Buy
 BASF40.167↑ Buy
 Bayer47.52↑ Sell
 Allianz160.04↑ Buy
 Adidas116.26↑ Buy
 Lufthansa5.579↑ Sell
 Siemens AG98.69↑ Buy
 Deutsche Bank AG7.396↑ Buy
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank6,540/ 6,620
(30/ 10) # 1,800
SJC HCM6,520/ 6,620
(-20/ -20) # 1,799
SJC Hanoi6,520/ 6,622
(-20/ -20) # 1,801
SJC Danang6,520/ 6,622
(-20/ -20) # 1,801
SJC Nhatrang6,520/ 6,622
(-20/ -20) # 1,801
SJC Cantho6,520/ 6,622
(-20/ -20) # 1,801
Cập nhật 03-10-2022 17:37:54
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ↀ Giá vàng thế giới
$1,664.75+0.450.03%
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Sản phẩmVùng 1Vùng 2
RON 95-V22.12022.560
RON 95-III21.44021.860
E5 RON 92-II20.73021.140
DO 0.05S22.20022.640
DO 0,001S-V24.18024.660
Dầu hỏa 2-K21.68022.110
ↂ Giá dầu thô thế giới
WTI$82.34-0.72-0.88%
Brent$88.20-0.59-0.67%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD23.730,0024.040,00
EUR22.844,1424.122,55
GBP25.913,3127.017,45
JPY160,53169,94
KRW14,3417,48
Cập nhật lúc 16:19:56 03/10/2022
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