- Fuel One of Several Issues Weighing on Pound
- Euro Pressure Easing Slightly But Still Low
- Stocks See Out Difficult September
The Sterling forex market is among the hardest hit during the current period of risk-off mood in the market and the USD return to strength in a big way. There are several contributing factors beyond the simple return of the Dollar, including the ongoing fuel crisis in the UK. At the same time, the Euro is also at a year low against the USD but is attempting to claw back some ground in early trading. On Wall Street, equities have finally drawn a challenging September to a close as trading continues to point in a negative direction.
Fuel a Chief Cause of More Pound Pressure
The Pound Sterling is trading well off its recent highs today below $1.345 against the Dollar. The relative strength of the Greenback has been felt across the board as most in forex trading continue to retreat to the currency during this period of caution and concern. For the UK in particular though, there is a confluence of other pressures weighing on the Pound, not least the ongoing gasoline shortage.
These issues have led to long delays at fuel stations and a general lack of availability as supplies continue to run dry. This shortage has primarily been caused by a lack of truck drivers, an issue that has been amplified even further by Brexit-related issues as the country tries to recruit more employees. More disruption here would undoubtedly continue to harm the Pound.
Euro Continues Trying to Bounce Back
The Euro has been trading at some of its lowest points since the end of 2020. Though the common currency continues to toil below 1.16 against the USD, there have at least been some positive signs in the latest trading.
Among the factors behind this slightly more positive push from the Euro could be that higher than expected CPI numbers for the month have been reported. These have come in at 3.3% and could act as another push for the ECB to step back on bond purchasing. Manufacturing PMIs are also being awaited, but the central concerns in Europe are also connected to the US and spiraling energy costs in the UK and on the continent.
Wall Street Counts Losses After Tough Month
It has been a case of ‘wake me up when September ends’ for many on Wall Street, and not only forex brokers. The stock market has endured a torrid month of sell-offs that did not close out yesterday with any sense of great enthusiasm. In fact, the street closed the book on its worst month since March 2020 with a monthly loss of over 5% for the NASDAQ.
This tone may yet continue into October as the futures market is also looking negative on the first day of the new month. Chief among concerns here are economic policy and outlook, as well as the lingering doubts around how China will progress in the coming weeks and months.