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Sterling has risen sharply against the euro since February 2020 on Wednesday after a sharp rise in inflation in the UK rose nearly a decade ago.
The pound added 0.4 per cent against the euro to buy € 1.19, compared to its best week against the euro since January 2021, while markets are expected to rise in December and the Bank of England as inflation expectations remain the same as the European Central Bank remained low.
The UK’s annual consumer price index rose to 4.2 per cent in October, which showed on Wednesday, more than double what the central bank had demanded and financial experts. expectations and 3.9 percent.
“There is a very good chance that interest rates will reach 0.75 percent next year” from a record low of 0.1 percent, said Dean Turner, a UK economist at UBS financial management.
The BoE is expected to become the first major bank to raise interest rates after global investors put a temporary decline in early 2020, according to Refinitiv’s findings from the exchange rate interest rate.
Earlier this week, BoE governor Andrew Bailey told a House of Commons committee he was “very upset” about the rise in prices in the UK, which has been the case. driven by rising electricity bills and the rising cost of used fuel cars.
The UK currency rose sharply against the dollar for a week, buying about $ 1.34.
The dollar index, which measures US currency against six others, has been trading at the highest level for 16 months on bets where the US central bank raises interest rates from a decline in the middle of next year. Rising consumer prices in the US rose for 30 years from 6.2 percent year-on-year to October, with retail sales declining. high expectations.
The euro is about to weaken against the dollar since July 2020, about $ 1.13. JPMorgan’s index of emerging market currencies has fallen sharply since September 2020, highlighting concerns about rising inflation for developing countries that borrow and export to US commodity prices.
The Turkish lira has dropped to 10.5 per dollar. The South African rand is around 15.5 per dollar – the weakest since March. The Mexican peso has also weakened despite the country’s largest bank raising interest rates on its last four meetings.
When Turkey’s central bank is reduced interest rates, planters in Brazil, Russia, Chile and Colombia among others are considered to be able to climb.
“But they can do so because of economic growth, which makes their markets less attractive,” said Tim Graf, macro strategy chief at State Street.
In the stock market, the Stoxx Europe 600 index was trading at a much lower rate, following a better climate than companies think across the Atlantic, indicating that companies are passing higher consumer prices.
Futures contractors following the Wall Street index of the blue-chip S&P 500 remained unchanged.
Other market trends:
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Yields over the 10-year US Treasury note, which sets the tone for global lending, were down 1.642 percent.
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European natural gas contractors coming in December rose 6.1 percent to € 99.8 per megawatt hour due to lack of food, as Russia also did in the past to increase exports.
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Asian markets fell sharply, with Tokyo’s Topix losing 0.6% and Hong Kong’s Hang Seng falling 0.2%.
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