(CTN News) – In a wave of enthusiasm not sensed since pre-Brexit days, the British pound has experienced a remarkable surge, outperforming other international currencies.
Pound Hits 15-Month High Against the US Dollar, Crossing the $1.31 Mark
The pound’s value has surpassed 45 baht, marking an impressive improvement of 4.34 percent since the beginning of the year. Additionally, it has reached a 15-month high against the US dollar, successfully breaching the $1.31 mark. Let’s explore the factors driving this sterling success.
Elevated interest rates in the UK have played a crucial role in propping up the pound. With stubborn inflation rates at 8.7 percent, the UK economy has witnessed increased borrowing costs.
These high-interest rates have attracted investors and bolstered the value of the pound. As imported goods become more expensive due to inflation, the demand for the UK currency remains strong.
Conversely, the United States has experienced a decline in inflation, dampening its interest rates’ attractiveness. This change has diminished the allure of hot-money inflows seeking quick profits, diverting attention to the sterling.
Expectations of the Federal Reserve continuing to raise interest rates have diminished, further driving investors towards the UK currency.
Meanwhile, the Thai baht faces challenges in the form of political uncertainty and an economic slowdown. The failure of the 8-party coalition, led by the Move Forward Party, to secure political power has led to ongoing threats of civil strife.
Thai Baht Faces Challenges Amidst Political Uncertainty and Economic Slowdown
Moreover, the Thai economy has witnessed a decline in exports over the past few months, contributing to an overall slowdown. The Thai economy currently lacks direction with a military-backed government in caretaker mode since the May 14 general election.
As the British pound continues its stellar performance, supported by elevated interest rates and persistent inflation, it stands as the star-performing international champion against a basket of currencies.
However, the Thai baht’s struggles amidst political uncertainty and an economic slowdown pose challenges to its stability in the global market.