Pound falls 0.5% to new 14-month low and Asian equities decline
The dollar hit a two-year high against major currencies on Monday after strong US jobs data late last week led traders to slash expectations for further interest rate cuts by the Federal Reserve. The dollar index, which tracks the US currency against the yen, euro and other major currencies, reached its highest level since November 2022, with the pound falling 0.5 per cent to $1.216 — a new 14-month low.
“Emerging market equities traditionally perform better when US interest rates are lower,” said Sunil Tirumalai, head of Asian equity strategy at UBS. “The Fed not cutting and weak currencies means less room for Asian rate cuts.” Hong Kong’s Hang Seng index declined 1.2 per cent, while mainland China’s CSI 300 was down 0.5 per cent.
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