There is a glimmer of hope on the horizon that the UK markets might stabilise themselves now that Rishi Sunak has taken the mantle as the next UK Prime Minister.
Following his ascension, 10-year gilt yields fell sharply to 3.74%, though the pound also fell in tandem, albeit only slightly.
Gilts’ wild ride: Volatility rarely seen on the bond market
The GBP/USD pair is changing hands at US$1.128 after having 25 pips knocked off it in this morning’s Asia trading session, while EUR/GBP remains more or less flat at 87.5p.
Sunak faces a steep hill: The pound against the US dollar
The EUR/USD pair is changing hands at US$0.987, and the moving averages point to some potential further upside, though the latest economic data shows contracting economic activity across the continent.
Parity between the euro and US dollar is likely to face still bearish resistance.
The Japanese yen edged higher against the US dollar, with USD/JPY falling below 150, though the pair remains at a precarious 148.8.
The Japanese government refuses to comment, but a suspected US$36bn intervention was likely responsible for the yen’s incremental recovery… there’s doubt as to whether it’s enough to resuscitate the struggling yen to any significant degree.
The Australian dollar is currently buying US$0.63.
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