Sterling pushed towards the lowest levels since the 1980s on Wednesday morning as traders eyed the Fed’s decision on rates later today.
GBP/USD traded as low as 1.1304 – the lowest level since the 1980s – before rebounding on Wednesday morning.
This week is packed full of central bank meetings and traders will learn of the Fed’s next move before hearing from the Bank of England tomorrow.
The Bank of England is forecast to hike rates by 50 basis points to 2.25% while economists are predicting the Federal Reserve will hike by 75 basis points to 3.25%.
Mini-Budget
The UK government will present a ‘mini budget’ on Friday, the first opportunity for Liz Truss new government to shape the UK’s growth trajectory.
Traders will be closely watching to judge the potential effectiveness of her measures, and how it will impact the health of the nations long term finances.
Truss will be under pressure to present a solid plan for economic recovery or one should expect further weakness in sterling.