The pound fell to its lowest level against the dollar in more than four months yesterday as the so-called ‘Trump trade’ put further pressure on global markets.
Sterling hit $1.2627, its weakest since July 2.
It has fallen from above $1.30 on the day Americans went to the polls last week.
Dollar rally: Sterling hit $1.2627, its weakest since July 2. It has fallen from above $1.30 on the day Americans went to the polls last week
Dollar strength in the wake of Donald Trump’s election victory has also hit the euro, which yesterday tumbled to its weakest level versus the greenback since October last year, at less than $1.05.
America’s currency has risen as the president-elect’s promises of tax cuts and tariff hikes stoke inflation fears – meaning US interest rates may stay higher for longer.
Matthew Amis, investment director at fund manager Abrdn, said: ‘The “Trump trade” has re-emerged in market pricing after faltering initially, and the US dollar has been the key beneficiary.’
Cryptocurrency bitcoin has been a major winner amid bets that a Trump presidency will mean friendlier regulation of the asset class.
But it is still subject to the volatile swings for which it has become notorious.
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