Currency News: Economic Super-Powers Suffer Currency Devaluation
Currency News
Brexit Macro Aftershock Effect On Purchasing power
Although many foreigners are fond of the drop in the UK pound, most people from the UK are dreading the fact that they no longer will carry their historical hierarchy in currency for the time being. This week more and more people from the UK are beginning to further feel the decline of the pound, specifically in regards to the euro.
The exchange rate is almost 1:1, thus many traveling through the EU are experiencing harsh devaluation in their spending power. However, this, of course, creates a larger macro problem for the British government, specifically in how to vamp up investment, specifically inflow of foreign investment into the UK. Although UK exports are becoming much more competitive, many companies, specifically foreign ones, that have large segments of their business within the UK are seeing their earnings drastically fall as a result of the drop in the pound’s value.
USD Slides Amidst Uncertainty of Effective Monetary Policy and a New Drop in Oil Prices
On the other side of the world, the US as well has been experiencing a decline in their currency, the dollar. The main reasoning is two-fold, with commodity prices, specifically oil prices, declining; and reports of uncertainty from the Federal Research meeting about the future of US monetary policy, with regards to whether increases in the interest rate are in sight. The chances of a rate hike have once again been diminished as there are mixed opinions between the Fed members, if US unemployment and inflation meeting the level requirements for an increase.
