The US dollar put in another surprisingly strong performance on Wednesday, strengthening by around half a cent against both the pound and the euro before the pound led a fightback. In the European arena, sterling reached its highest level this week over the euro, even as unsettling headlines around the public finances continued to arrive.
Despite plenty of talking points this side of the Atlantic, attention was focused stateside after President Trump’s recent wrangling with the Federal Reserve. The under-fire Lisa Cook pledged to sue the administration for wrongful dismissal, yet all the ruckus somehow failed to put the brakes on the dollar ahead of this afternoon’s GDP report.
For the British government, the cost of borrowing has become an increasing cause for concern ahead of the autumn budget. Yesterday, the price of long-term sovereign debt climbed to its highest level since 1998, effectively halving the headroom Chancellor Rachel Reeves has to work with.
Elsewhere, cabinet staff highlighted their enthusiasm for a youth migration scheme with the European Union. That might be seen as an effort to call the economic cavalry, as it were, particularly as last year’s fertility rate was the lowest (1.41) since records began in 1938.
Washington’s trade tariffs on India came crashing into effect early yesterday morning. The latest tariffs, which seek to punish New Delhi for purchasing Russian oil, now mean that Indian goods effectively face a 50% barrier to enter the American market. The Indian rupee has weakened by close to 1% against the US dollar so far this week.
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