The big news today involved drama happening in London.
This past Friday, UK Prime Minister Liz Truss fired Kwasi Kwarteng, and this morning, appointed a new Chancellor of the Exchequer, Jeremy Hunt.
In order to calm financial markets, the first item on his to-do list was to reverse virtually all of his predecessor’s extremely controversial plans to cut taxes.
The Chancellor of the Exchequer (or “Chancellor”) is responsible for all economic and financial matters in the United Kingdom, with the role equivalent to that of a finance minister in other countries. As one of the most senior members of the Cabinet, they are responsible for setting levels of taxation and public spending by the government.
In a statement today, Hunt confirmed that he was scrapping £32bn of the proposed tax cuts, and scaling back energy subsidies proposed in last month’s “mini-budget”.
Chancellor. Hunt acknowledged that his predecessor had “spooked financial markets by failing to explain how he would fund tax cuts that were unveiled.”
As he spoke, gilts (UK government bonds) and the British pound (GBP) rallied.
GBP/USD broke above 1.14 before settling above 1.1350.
Later in the day, PM Liz Truss apologized for going “too far and too fast” with the economic policies in her “mini-budget” and accepted responsibility for the problems created by it.
Let’s review what else happened in the FX market today…
Currency Market Movers
Which currency pairs gained the most today?
As shown by our FX Market Movers page, the “guppy” aka AUD/JPY was the leader of the pack, gaining 1.59% or 146 pips. ?
Which currency pairs lost the most today?
USD/CAD was the biggest loser, falling 1.15% or 159 pips! ?
Currency Strength
What was the overall strength or weakness of individual major currencies today?
Based on the Currency Strength Meter on MarketMilk™, AUD was the strongest currency. ?
The JPY was the weakest currency.
Currency Short-Term Trends
When it comes to short-term trend strength, the British pound (GBP) is showing the most bullish strength, along with the euro (EUR) and Canadian dollar (CAD).
The Japanese yen (JPY) shows the most bearish strength.
AUD, NZD, and CHF are also trending bearish but are weakening.
Currency Volatility
Which currency was the most volatile today?
Based on our Currency Volatility Meter, it’s the Japanese yen (JPY).
Which currency pair was the most volatile today?
Given that JPY was the most volatile currency, it has to be a JPY pair. But which one?
GBP/JPY. It moved over 2.15% or 357pips!
