Pound pummels to 37-year low on anniversary of Black Wednesday



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Pound pummels to 37-year low on anniversary of Black Wednesday

On Friday, the British Pound has pummelled to a fresh 37-year-low against its American peer, as the currency was marking its 30th anniversary of “Black Wednesday”. UK had departed Exchange rate mechanism on September 16, 1992, which in effect had resulted in a raft of wild swings alongside a steep devaluation of the currency.

At that day, the British Pound had fallen as much as 4.3 per cent and had closed out the session at $1.1778. Sterling dropped over 1.0 per cent to $1.1351 on Friday, the lowest since 1985, however, pared some losses late in the session and rounded off the day at $1.1420.

In the matter of the fact, latest downswing in Sterling came forth as a raft of major and emerging market currencies had been drowning sharply against the greenback, as a worrisome rise in US CPI (Consumer Price Index) bolstered investors’ belief that the US Fed would be priced in for a 100-bps (basis percentage point) rate-hike at its September policy meet.

Pound bottoms to 37-year-low versus US Dollar

Nevertheless, Pound has struggled terribly this year, losing a roughly 15.43 per cent valuation against the American Dollar, as the Brexit-hurt Kingdom’s economy appeared to be hanging on a cracked cord.

Adding further strains, PM Boris Johnson’s ousting from the Downing Street that followed a number of unfortunate acts including an unfortunate resignation from Sajid Javid who helped Johnson take hold of the office and a number of traitoring from other parliament members as claimed by former PM Johnson, kept British economy at its toes.

On top of that, it remains uncertain on how Britain would react to an entirely polarized global economic landscape under the PM Truss, causing further pain for the currency that had shrugged off nearly 18 per cent of its valuation over past twelve months.