The British pound rose to a six-week high on Tuesday as Rishi Sunak became British Prime Minister as risk aversion improved while the dollar fell to a three-week low on weaker US economic data expectations cooled the pace of the future of US rate hikes. The potential for exchange rate fluctuations is high this week as central banks in the euro zone and Canada are expected to hike rates by 75 basis points and the Bank of Japan prepares to break ultra-low levels. Interest rates to shore up its ailing economy. Rishi Sunak on Tuesday became Britain’s third prime minister in two months, tasked with combating a deepening economic crisis and a warring political party.
GBP/USD rose on Tuesday as the Rishi Sunak era officially began at 10 Downing Street on Tuesday. Sunak is Britain’s third prime minister in just two months and markets are expecting the Sunak government to offer a steady hand as Britain grapples with mounting economic woes. Markets welcomed Rishi Sunak’s announcement as Conservative Party leader as sterling continues to appreciate and long-term government bond yields fall. Eyes are now on the budget proposal due at the end of and the next Bank of England meeting on November 3rd. In his first speech as Prime Minister, Sunak promised to rectify this Wrongful of the outgoing Truss administration while suggesting that “tough decisions” lie ahead. Sunak also made it clear that he wants to restore credibility and trust in the government, saying he understands the work he had to do to restore trust after everything that happened.