British Pound hits one-month low against the US Dollar
It has been a bumper month for the US Dollar, which has been bucking the trend of the general encumbered state of the US economy during a period of high inflation and concerns over rising costs of living.
The US Dollar has been performing very well in general over recent weeks, making headway against other major currencies, drawing some speculation at the beginning of May that parity with the Euro may be on the cards.
Whilst that did not happen, the US Dollar continues to strengthen and today it has reached a high point at 1.22 against the British Pound, representing the highest point in the past 30 days.
This morning, talks of a potential move toward parity between the Euro and the US Dollar have resurfaced, and the US Dollar becomes the currency that is not only going in the opposite direction to the generally inflationary nature of the overall US economy, but is trouncing almost all of its peers apart from the Japanese Yen which remains strong.
Just as is the case in the United States, Britain and the Eurozone also are regions which remain lumbered with high levels of inflation, and the United Kingdom has been subjected to four interest rate rises this year, the most recent one having been announced last week by the Bank of England.
Bearing this in mind, the European Union and the United Kingdom face many of the same challenges that the United States faces, hence confidence in the US Dollar when comparing it to other major currencies in the Western hemisphere is likely high due to the Euro and Pound being the sovereign currencies of equally inflationary national economies.
The Federal Reserve has been mulling further interest rate hikes, but with the same conundrum being worked on by the British and European central banks, there is little advantage in terms of confidence across the other regions which could be a contributor to the US Dollar's relative strength.