The forex market continues to fluctuate, even more so than usual. What was once one of the safer options for investors among other financial markets, it has since then proven to be just as volatile. The worst thing about the currency market is that the larger international policy greatly affects prices.
So as soon as something is in one of the major countries, the rest of the currency pairs tend to react. And with Prime Minister Liz Truss resigning, the forex market has seen the UK sterling falling once again.
In fact, with the resignation of the UK prime minister after just 45 days in office, the US dollar index saw a short rally. Although the index has recently seen a drop in value following investors looking for riskier investments.
So, despite hitting something of a small slump, the UK sterling is still falling.
A Disappointing Fall
One of the most disappointing things for investors to see during the latter half of this week was the Cable falling even though the gilt yields managed to ease off. The Sterling and USD pair is currently trading at $1.14; the pair is seeing plenty of support throughout the one-hour chart.
While the US dollar is very unlikely to give in even the slightest, for now, it is more than likely that the UK sterling will keep dropping.
Many European investors are concerned about the current state of the Sterling since it is likely that these continuous dips might lead to the country having to intervene.
An intervention, especially during the more volatile state of the UK government, could lead to rising interest rates and a host of central bank decisions that could hurt various financial markets.
Euro Still Manages to Hold Out
While the Sterling continues to drop in the forex market, the Euro is still managing to hold its own. Not only was the euro doing strong against the US dollar, but it also managed to hold its own against the Swiss franc.
The EUR/CHF pair managed to add another 0.2% to their overall value, which, brought the pair up to a staggering 0.98 francs. This value was the highest it has been in six weeks, allowing many to feel greatly at ease.
The USD/EUR pair also seems to be doing fine, even though it could likely do better. While the pair was able to add as many as 30 pips, it still had a long way to go to recover all of the losses of yesterday.
Other Currencies Also Continue To Fluctuate
Various other currencies like the AUD or the YEN are also seeing their prices drop against the dollar today. Japan has been having an especially difficult time as it continues, as its currency dips to the point of necessary intervention.