The collapse of the pound disrupts the political scene in Britain (Getty)
Confusing the strong dollar world currenciesAnd pressures on the various economies, especially with the flight of money to American markets. The World Economic Forum believes that the strength of the dollar has hurt most currencies and investors in the financial markets, with the exception of the American tourist, who is now touring Europe and the countries of the world at the lowest prices.
Until now pink dollar More than 10% in 2022 against other major currencies – close to a two-decade high – as investors worried about a global recession rushed to cash in on safe-haven dollars in turbulent times.
What increases the dollar’s appeal is that the Federal Reserve continues to raise interest rates to cope with high inflation. This has made US investments more attractive, as they now offer higher returns.
Investors worried about a global recession rushed to cash in dollars, which are considered a safe haven in turbulent times.
According to the World Economic Forum, “US travelers rejoice that a night in Rome once cost them $ 100 and now costs about $ 80, but the dollar’s rise presents a more complex picture for multinational corporations and foreign governments.” .
In terms of global trade, roughly half of whose bills are issued in dollars, the high US currency has confused companies and industry that pay import bills in dollars, as well as developing countries that have to pay. their dollar debts.
Volatility in US stock and bond markets, due to rising dollar interest, has led to global exchange rate crises, as the dollar has risen largely against emerging currencies, with the exception of American currencies Latina, who managed to escape the “dollar slaughter”.
Morgan Stanley believes that the continued appreciation of the dollar will lead central banks to try to manage the costs of sovereign loans more effectively.
In Japan, where the yen has fallen to its lowest level in 20 years, fears have increased in Tokyo that the Japanese fortunes accumulated for decades are fleeing the Land of the Rising Sun to the United States. This is despite Japan being one of the countries benefiting from a weak currency in export growth.
The euro fell due to the European Central Bank’s delay in tightening monetary policy and raising interest rates, which it deemed inevitable.
In Europe, the euro fell to less than a dollar. The European Central Bank recently implemented a policy of raising interest rates in an attempt to save the currency from collapse and cope with inflation which negatively affects the currency.
The euro fell due to the European Central Bank’s delay in tightening monetary policy and raising interest rates, which was deemed inevitable.
As for the Chinese yuan, the implementation of the new coronavirus non-proliferation policies weakened expectations of economic recovery and prompted the Chinese central bank to ease policy, causing the yuan to depreciate.
In terms of the British currency, the British website “Economic Help” sees that the possibility of Britain entering an economic recession is almost certain.
“If the UK goes into recession, UK interest rates should go down relative to other countries,” he says. This would make the UK less attractive to investors and hot cash flows would leave the London Stock Exchange and move to countries with higher interest rates.
There are fears about the pound exchange rate if investors flee Britain
Therefore, there are concerns about the pound exchange rate if investors flee Britain, as that means massive selling of the pound and buying other currencies, which could bring the value of the pound down.
But economic stagnation will lead to an increase in the public debt ratio, and this could cause investors to worry about countries’ ability to service bonds, especially in the eurozone, which is suffering from a series of political crises.
