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The Pound collapses and moves towards parity against the dollar. Truss has not convinced, or no one can do anything against the Super Dollar

The pound extended its losses for the second session to a new all-time low of $ 1.06, after falling 5% at one point to around $ 1.0327 during Asian trading hours. UK Finance Office said over the weekend that there will be "a lot more to do" on tax cuts.

On Friday, the new government announced a plan to revive growth that includes several tax cuts, including the cancellation of the expected corporate tax hike at 25%, keeping it at 19%, and which will cost £ 45bn overall. by 2026-27. The announcement was not welcomed by investors and traders, resulting in a 5% drop to some extent during Asian trading hours.

Investors 'fear seems to have been linked to the possibility of new debt linked to Tuss' light budget promises. New debt now, with rising interest rates, can mean a spiral of hard-to-control debt, with inflationary risks linked to debt monetization. Evidently, there would be no confidence in the ability of Tuss, given also the current fragility of the Conservatives and the depth of the economic crisis, to adequately control the budget deficit.

Or, to put it simply, the dollar is too strong and crushes any currency, from the Yen, to the Yuan, to the Euro to the Pound. If the Super-Dollar appreciates against the currencies of strong countries, we can imagine what it can do to developing and unaligned countries, and in fact we know that several South American countries have serious problems. This is a very, very difficult time for anyone who has borrowed in US currency


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The article The Pound collapses and moves towards parity against the dollar. The Truss has not convinced, or no one can do anything against the Super Dollar comes from ScenariEconomici.it .


This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-sterlina-crolla-e-si-avvia-alla-parita-verso-il-dollaro-la-truss-non-ha-convinto-o-nessuno-puo-fare-nulla-contro-il-super-dollaro/ on Mon, 26 Sep 2022 08:00:20 +0000.