London Daily

Focus on the big picture.
Friday, Sep 11, 2026

Soaring US dollar pushes pound to biggest monthly fall since 2016

Soaring US dollar pushes pound to biggest monthly fall since 2016

The problematic UK economy is not the only thing causing difficulties for the pound - it is also up against a very strong US dollar.

The soaring US dollar has pushed the pound to its biggest monthly fall since October 2016.

The pound shed 4.6% in August, having lost 14% so far this year, as concerns grow about the state of the British economy.

On Thursday afternoon it hovered just above $1.15.


The news was not much better against the euro - August was sterling's worst month there since May 2021 and on Thursday it dropped as low as 86.7p.

It comes after UK inflation passed 10% in July - the latest figure available and the highest in 40 years - squeezing the wages of householders also facing record increases in energy bills.

Viraj Patel, global macro strategist at Vanda Research in London, told Reuters news agency: "It seems like a bit of a perfect storm now for the pound.

"There is this whole 'sell Europe, sell UK' theme going on right now and it is getting quite extreme given the myriad of
political and energy risks.

"There's also a Liz Truss risk premium starting to get priced in.

"Clearly the market is not responding well to some of the policies Truss has announced, especially the funding of the twin deficit in the UK."

Liz Truss, the foreign secretary, is widely expected to replace Boris Johnson as prime minister when the result of the leadership contest are confirmed on 5 September.

But it is not just the UK's political and economic situation that is hurting the pound - it is also against a very strong US dollar.

The greenback hit a 24-year high against the Japanese yen on Thursday and gained more than 1.2% against the euro.

Michael Hewson, chief markets analyst at CMC Markets, said of the pound's difficulties: "It's not just sterling weakness - it's a dollar strength story.

"Sterling has its problems, but they are not unique to it - high inflation, surging energy prices and falling disposable incomes."

Newsletter

Related Articles

0:00
0:00
Close
John Lewis Partnership Loss Widens to £124 Million
UK Government to Put White Working-Class Social Mobility at Centre of Equality Policy
McLaren Plans £450 Million Technology Investment Creating 1,000 UK Jobs
UK Chancellor Faces Calls for Wealth Taxes and Public Ownership in Autumn Budget
English Mayors to Gain Powers to Impose Uncapped Overnight Tourist Taxes
JPMorgan’s Jamie Dimon Warns UK Government Against Bank Windfall Taxes
UK Air Traffic Control Outage Cancels More Than 2,000 Flights
UK Imposes Trade Ban on Israeli Settlements in the West Bank
UK Borrowing Costs Surge as Middle East Tensions Push Long-Term Gilt Yields to Highest Since 1998
Buckingham Palace Says Prince Harry and Meghan Will Not Resume Official Royal Duties
UK Treasury Faces Calls to Scrap £100,000 Childcare Support Threshold
Trades Union Congress Urges Labour Government to Rewrite Migration Policy
Riot Police Deployed After Anti-Migrant Protests Turn Violent in Portsmouth
UK Considers Replacing Some Disability Cash Payments With Direct Services
JPMorgan’s Jamie Dimon Warns UK Chancellor Against Higher Banking Taxes
UK Announces New Sanctions Targeting Israeli Settlements in West Bank
Metropolitan Police Investigate Alleged Illegal Donations to Reform UK
UK Charges Wiltshire Man With Assisting Russian Intelligence
UK Orders Urgent Review After Air Traffic Failure Cancels More Than 2,000 Flights
Merz Rebukes AfD Expansion in Saxony-Anhalt
King Charles Confirms Prince Harry and Meghan Will Remain Private Citizens
Labour Selects Former Child Refugee for By-Election in Keir Starmer’s Former Seat
Foreign Private Equity Accelerates Takeovers of London-Listed Industrial Companies
NHS Maternity Care Faces Scrutiny Over Support for Mothers After Caesarean Births
BBC Warns Staff Strikes Are Likely Amid Job Cuts and Programme Cancellations
English Housing Affordability Improves to Best Level in More Than a Decade
UK Health Commission Proposes Framework for Wider AI Adoption Across NHS
Labour Faces Pressure for Wealth Tax Ahead of Autumn Budget
Metropolitan Police Open Criminal Investigation Into Alleged Foreign Donations to Reform UK
UK Police Deploy Riot Officers After Anti-Immigration Unrest in Portsmouth and Dover
UK Defends Sanctions on Israeli Settlements Despite Diplomatic Retaliation
UK Air Traffic Control Failure Cancels More Than 1,000 Flights and Disrupts 65,000 Passengers
Compass Urges £10 Million Wealth Tax and Public Ownership Ahead of UK Autumn Budget
UK Government’s Devolution Plans Face House of Lords Scrutiny
Maldives Seeks New Chagos Sovereignty Talks With UK Prime Minister Andy Burnham
UK Airports Face Continuing Disruption After National Air Traffic Control Failure
UK Bans Imports From Israeli Settlements and Expands Sanctions on Iran
British Chambers of Commerce Forecasts UK Growth of 1% as Investment Remains Weak
UK Suspends Local Government Reorganisation Decisions and Cancels Planned Shadow Authority Polls
UK Parliament Opens Inquiry Into Gaps in Climate Change Preparedness
Andy Burnham and Xi Jinping Hold Talks on Trade, Security and British Consular Cases
UK Joins France, Canada and Other Nations in Measures Against Israeli West Bank Settlements
UK Announces New Sanctions Targeting Iranian Nuclear and Military Networks
British Chambers of Commerce Calls for Business Rate Reform and Productivity Support
UK Farmers Warn Dry Summer Could Reduce Crop Yields and Push Up Food Prices
UK Rail Networks Hit by Widespread Delays After Major Signalling Failures
Matt Clifford Resigns as ARIA Chair After Conflict-of-Interest Scrutiny
UK and France Say Joint Border Operations Have Prevented More Than 48,000 Irregular Channel Crossings
UK Core Inflation Remains Above Expectations as Utility and Commodity Costs Stay Elevated
Jaguar Land Rover Considers Up to 4,000 UK Job Cuts Amid Automotive Industry Pressure
×