British Pound (GBP) Hits New All-Time Low Against The USD; Bitcoin Stable At $19k
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The British pound (GBP), once the world’s custodian of value, hit an all-time low against the US dollar (USD) on Monday, falling to $1.036. Something similar happened to the euro, when the EUR/USD pair hit $0.95540 per dollar and hit one of the lowest levels in history. Bitcoin (BTC) remains stable at $19,000.
The British pound (GBP) is at an all-time low against the dollar
The British pound has been in every headline this morning as it melts towards an all-time low. This comes after the new Prime Minister announced his budget on Friday. Despite this rapid decline, the GBP recovered to $1.07, but analysts believe this could change in the near term as the GBP could hit parity with the USD.
Nomura believes that the British pound may continue to fall in the near term reach $0.975 by the end of the year and $0.95 in the first quarter of 2023.
Nomura research analyst Jordan Rochester wrote earlier today:
“This is a fundamental balance of payments crisis that politicians hope will eventually subside. Hope is not a strategy, and markets reflect that.
BREAKING: GBP IS NOW PEGGED TO REDEMPTION pic.twitter.com/lXgY1IQVLB
– No Jerome Powell (@alifarhat79) September 26, 2022
Some have even compared the pound to Terra (LUNA), which crashed earlier this year to $0, affecting investors worldwide.
Today, Bitcoin (BTC) held steady at $19,000, down 0.3% in just 24 hours. This is a relatively stable day for cryptocurrencies as they fluctuate much more. Other coins such as Ethereum (ETH) or Litecoin (LTC) have also registered relatively small fluctuations.
It is worth pointing out that BTC has remained relatively stable despite the current market disruption that affected some of the world’s largest and oldest currencies. This latest volatility has had a strong impact on currency markets, which may continue for the foreseeable future if central banks do not take immediate action.
Bank of England exempt announcement stating that they are monitoring financial market developments very closely in light of the significant repricing of the pound and other financial assets. Market participants believe that the Bank of England (the central bank) could raise interest rates aggressively in the coming days to stabilize the pound and restore investor confidence.
Meloni won the Italian election, EUR falls to $0.955
The Euro has also been affected this morning after Giorgia Meloni won the key elections in Italy on September 25th. The eurozone common currency fell to $0.9553 per dollar on September 26. Despite a small recovery to $0.97, it has now stabilized at $0.9618.
The impact of the election has been relatively minor considering that the euro’s recent move is part of a larger market slide that began several months ago when the euro reached parity with the USD.
The recovery of the euro and the pound is now a matter of time, but the Italian election could have a deeper impact at the EU level, which could increase instability if Meloni cuts ties with the common bloc.