The pound briefly rebounded against the US dollar last Friday before Prime Minister Kwasi Kwarten announced the UK government’s ‘mini’ budget as recent support measures helped bolster sentiment.
The pound rose 0.8% against the dollar on Friday morning in Asia to $1.1203, Sold out quickly this week This was driven by concerns over the £45bn debt tax relief package.
Analysts say the Bank of England announced a £65bn bond-buying program Moderate volatility in the gold leaf marketand a move by the Office of Budget Responsibility to bring up an assessment of the economic forecasts underlying the tax cuts helped boost sentiment.
“British banks’ actions in the gold and silver markets and OBR’s more timely assessment of economic forecasts have boosted market confidence in the near term,” said Mansur Mohiuddin, chief economist at Bank of Singapore. said.
But Mohi Uddin said the “bigger concern is that the underlying fundamentals haven’t changed” and the BoE will be forced to raise rates significantly in November if the government sticks to its plan. “Otherwise the pound turbulence would be even more intense.”
In the stock market, Asia-Pacific stocks followed Wall Street’s decline in technology stocks after analysts downgraded Apple’s market value by $120 billion.
Asia’s decline came after Nasdaq Composite down 2.8% The S&P 500 fell 2.1% after Bank of America downgraded Apple from buy to neutral.
The downgrade, citing expectations of weaker consumer demand for the iPhone maker’s flagship product, caused Apple’s stock to fall 4.9%.
Facebook owner Meta also fell 3.7% after CEO Mark Zuckerberg flagged the company’s plans. First-ever reduction in personnel.
Japan’s Topix index fell 1.6% on Friday, while Hong Kong’s Hang Seng index and China’s CSI 300 index both Shanghai and Shenzhen-listed stocks fell 0.3%.
Futures show a pause in selling in UK and European stocks this week, with the FTSE 100 opening just 0.1% in London after falling almost 2% on Thursday. The Euro Stoxx 50 was set flat.
https://www.ft.com/content/466b3c8a-bf5a-4f3d-b1e1-2cde9c6f9600 Sterling temporarily erases losses from Kwasi Kwarten’s ‘mini’ budget