On Wednesday the pound fell by 1% against the US dollar which is now rests at $1.1410 which is it’s lowest level since 1985 when Margret Thatcher was at the helm.
This news is a huge hammer blow for Liz Truss as she has only been in office for just over 24 hours and analysts argue the pound has fallen as a result of the new Prime Minister and her energy plan.
The 37 year low is as a direct result of Liz Truss proposed borrowing plan to combat the energy crisis which has spooked investors.
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The US dollar has recently seen a 24 year surge which also closed on a 20 year high against the Euro.
Russ Mould, investment director at AJ Bell said, “The DXY index, which measures the value of the dollar against six major currencies, stands at its highest level since 2002.
“Investors need to keep a close eye on this, because periods of marked dollar strength in the past have seen chaos in emerging markets, but also weakness in developed market stocks and commodity prices for good measure.”
Jordan Rochester, an analyst at Nomura, told the Telegraph: “A change of leadership is usually pound positive, especially when up to £130billion of fresh deficit spending may be on the agenda.
“But the current crisis is unlike any we’ve seen in the recent past.”
Rochester warned that the Prime Minister’s new energy support package is “is a recipe for the balance of payments to continue to deteriorate, the UK’s terms of trade to worsen and with it the the pound’s value to fall.”