Crumbles against the dollar going below $1.04
In early Asia trade, pounds fell close to $1.03 before regaining some ground to stand at about $1.07 on Monday morning, UK time.
This situation has prompted traders into exiting their positions amid concern that the new government’s economic plan will stretch Britain’s finances to the limit.
The fall in the currency have ensured the US dollar hit a new two-decade peak against a basket of major peers, while the euro hit a fresh two-decade low against the greenback.
This event was sparked by the new finance minister Kwasi Kwarteng unveiling historic tax cuts funded by the biggest increase in borrowing since 1972. Kwarteng on Sunday dismissed the freefall in the pound, saying his strategy was to focus more on longer-term growth and not short-term market reaction.