On Monday, the new UK finance minister, Jeremy Hunt, scrapped most of Prime Minister Liz Truss’s economic plan and scaled back her energy support scheme, making a historic turn in policy to try to stem the loss of investor confidence.
Market participants said the reversal of these measures in the UK prompted investors to reassess the outlook for UK interest rate hikes.
Sterling rose briefly at the start of the session, but then traded 0.5% lower at $1.1303.
The dollar-yen pair strengthened about 3% in October, cornered by traders’ nerves after the Bank of Japan’s first yen-buying intervention since 1998 on September 22.
Japanese Finance Minister Shunichi Suzuki said after the recent Group of Seven (G7) meeting that “there was no discussion about what coordinated measures could be taken” on currency volatility.
Investors expect the forex market to remain volatile amid high political and economic risks in the UK.
The dollar index – which measures the greenback against six pairs of currencies, including the pound sterling, the euro and the yen – added 0.13% to 112.22 units.
Source: Ambito
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