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Sep 23 - 07:55 AM

GBP/USD - COMMENT-Time To Gamble? GBP/USD And The 1.00 Question

By Rob Howard  —  Sep 23 - 05:50 AM

Sept 23 (Reuters) - The chance of cable dropping to 1.00 for the first time will rise if King Dollar continues to reign supreme and confidence in British assets deteriorates under the new government led by Liz Truss.

GBP/USD has never traded at parity, but got very close to that level in 1985, with 1.0075 mooted as the record low.

Cable slumped to 1.1075 on Friday, its lowest level since 1985, after Truss's finance minister Kwasi Kwarteng announced he was slashing taxes to try to drive economic growth. nL8N30T5LM

Earlier this week, the IFS think tank said "setting plans underpinned by the idea that tax cuts will deliver a sustained boost to growth is a gamble, at best".
UK minister Simon Clarke responded Friday, saying "this isn't a gamble, the weight of history and evidence is with us". nL8N30S5I8nL8N30U17Z

Friday also saw September's flash UK PMI readings come in sub-50, marking a contraction in activity, including in the services sector - the dominant segment of the UK economy. nZRN0057JP

Related comments: nL1N30C0IOnL1N2Z00HJnL1N30U0ES

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Source:
Refinitiv IFR Research/Market Commentary

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