Sterling gains U-turn on tax cuts, yen weakened past 145 per dollar – Rayrice Forex News

Sterling gains U-turn on tax cuts, yen weakened past 145 per dollar

SINGAPORE/LONDON, Oct 3 (Reuters) – Sterling rose on Monday after Britain reversed plans to cut its top income tax, while the yen weakened to more than 145 against the dollar last month, the level at which Japanese authorities intervened last month.

The pound touched a one-week high of $1.128, its highest level since Sept. 22, the highest level since Sept. 22, before British Finance Minister Kwasi Kwarteng presented markets with a new “growth plan” to cut taxes and deregulation. Backed by massive government borrowing.

On balance gains, sterling was up 0.3% at $1.1199.

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Quartet spoke about the scrapping of plans to cut the 45% tax band, a controversial part of a package of measures that pushed sterling to an all-time low of $1.0327 and sent gilts spiking. It prompted him to enter the Bank of England. Read more

“Obviously sterling has performed better on the news, but there are still many questions, in the end the 45 pence tax rate was only a small part of the unfunded tax cuts announced,” said Jane Foley, head of FX strategy at Rabobank.

“The question remains, is this enough? The answer will be clear in a few weeks when the Bank of England measures are over. UK assets, pounds and gils are not out of the woods yet, and the British government has a lot to do. Do to restore credibility.”

The Japanese yen fell to 145.40 against the dollar, its first decline since Sept. 22 after authorities intervened to expand the currency.

The dollar was up 0.22% at 145.06 yen, as Asian trade slowed due to holidays in China, South Korea and some Australian states.

“Every time[dollar/yen]goes to 145, people get excited. But sometimes what matters is the size of the move,” said OCBC currency strategist Christopher Wong.

“That said, we remain vigilant and will not rule out subtle yen intervention using current levels as a reference if the yen’s rate of decline increases again, possibly breaching 146.”

Monday’s decline came after Finance Minister Shunichi Suzuki said Japan was ready for “decisive” measures in the foreign exchange market if the yen’s excessive movements continued. Read more

The yen has been weakening due to policy at a time when Japanese interest rates are rising elsewhere, and last month it issued a record 2.8 trillion yen ($19.7 billion) boost after much speculation authorities intervened in markets. The currency. Read more

The euro was slightly lower at $0.97965, with another jumbo European Central Bank rate hike expected this month following red-hot inflation, fueling fears the economy could tip into recession.

Data on Friday showed that euro zone inflation rose to 10.0% in September from previous forecasts, above expectations of 9.7%.

The Australian and New Zealand dollars gained ground this week ahead of expected rate hikes by their central banks, with the Aussie up 0.4% at $0.6437 and the Kiwi up 0.9% at $0.5645.

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Reporting by Rae Wee; Editing by Clarence Fernandez and Jason Neely

Our Standards: The Thomson Reuters Trust Principles.


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