London (awp/afp) – The pound fell on Thursday, weighed down by concerns both about the ability of the British government to control public debt and about the country’s economy, and by Donald Trump’s threats to increase duties. customs.
Around 9:20 p.m. GMT, the pound erased part of its losses of the day, and only lost 0.43% against the greenback, at 1.2310 dollars. Earlier, it hit its lowest level since November 2023, at $1.2239.
The pound lost 0.26% against the European currency, to 84.01 pence per euro.
“The weakness of the pound reflects greater investor unease” about the situation “on the gilts+ market”, British Treasury bonds, underlined Lee Hardman, analyst at MUFG.
On Thursday, the borrowing rate on 30-year British bonds recorded its highest since July 1998, while yields on 10-year British government bonds were at their highest since July 2008.
Generally, rising bond yields tend to support a currency, attracting investors.
This is not the case here, as the rise in the UK’s borrowing costs “suggests a lack of confidence in the ability” of the Labor government “to fuel economic growth” and control the country’s debt, summarized Kathleen Brooks of XTB.
Labor has struggled to convince the British business world since returning to power in July 2024.
This situation “prompts comparisons” with the collapse of the pound and the surge in government borrowing rates which followed former Prime Minister Liz Truss’s massive, unfunded spending announcements in September 2022 , noted Mr. Hardman of MUFG.
The British currency is also falling “against a stronger dollar”, estimated Ipek Ozkardeskaya, analyst at Swissquote Bank, in the face of “fears that the presidency of Donald Trump will stimulate inflation in the United States”, and delay the easing of interest rate of the Federal Reserve (Fed).
On Wednesday, CNN said the president-elect, whose inauguration is scheduled for January 20, would consider a declaration of national economic emergency providing him with the legal framework necessary to quickly implement tariffs on products entering the United States. United.
In a report from their last meeting on December 17 and 18, published on Wednesday, several officials of the American central bank were also concerned about seeing prices calm down less quickly than expected, removing the prospect of a further decline. rate in January.
“Apart from the pound, it was a fairly quiet session,” said Marc Chandler of Bonnockburn Global Forex, due to a day of national mourning for the funeral of former President Jimmy Carter.
The “buck” – one of the nicknames of the American currency – “is trading in the same range as the day before”, going through a phase of “consolidation”, according to Mr. Chandler.
Around 9:20 p.m. GMT, the dollar advanced 0.17% against the euro to $1.0301.
Forex traders are now awaiting the release of employment figures for December by the Bureau of Labor Statistics (BLS) on Friday.
Cours de jeudi Cours de mercredi 21H20 GMT 22H00 GMT EUR/USD 1,0301 1,0318 EUR/JPY 162,85 163,39 EUR/CHF 0,9398 0,9401 EUR/GBP 0,8368 0,8346 USD/JPY 158,10 158,35 USD/CHF 0,9123 0,9111 GBP/USD 1,2310 1,2363
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