Stock Market

Story: Pound Plunges Against Dollar as US Debt Deadline Looms

By Sakamoto Nashi

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Fed Minutes Add Fuel to Dollar Rally. Wednesday's Federal Reserve minutes didn't help the pound's cause.

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Corporate Impact Spreads. UK exporters are feeling the pinch already. Rolls-Royce shares fell 1.

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The pound took a hit Thursday. Sterling dropped to $1.2412 by 10:00 AM GMT, falling from Wednesday's close as traders rushed into the dollar ahead of a crucial US debt ceiling…

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The White House basically gave Congress until Friday to raise the debt limit or face potential chaos.

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The euro slumped to $1.0890 while the yen stayed put around 133.50 per dollar. Australia's currency lost ground, trading at $0.7540.

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Wednesday's Federal Reserve minutes didn't help the pound's cause. The Fed's latest release showed officials taking a cautious stance on future rate hikes, which paradoxically…

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Bank of England Governor Andrew Bailey hasn't said much about sterling's slide, but he's scheduled to speak next week.

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The BOE's April 13 meeting is becoming a bigger deal by the day. Bailey and his team will probably have to address the currency weakness head-on, particularly if it starts…

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UK exporters are feeling the pinch already. Rolls-Royce shares fell 1.2% in early trading as investors worried about currency impacts on international sales.

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HSBC's Paul Mackel put out a research note saying companies need to get serious about hedging strategies right now. With sterling at $1.

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Barclays revised its pound forecasts downward, citing the US political mess as a key factor.

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The IMF jumped into the fray April 6 with Managing Director Kristalina Georgieva warning about global spillover effects if the US defaults.

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Safe haven demand is spreading beyond the dollar too. The Swiss franc climbed to 0.92 per dollar as traders looked for alternatives to volatile major currencies.

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European Central Bank President Christine Lagarde hasn't made any policy moves yet, but she's expected to address the euro's weakness at an upcoming press conference.

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The Financial Times reported that several big funds have been loading up on dollars this week, anticipating more turbulence as Friday's deadline approaches.

The Currency Analytics

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