Sterling, euro slump to multi-decade lows − Edward Rizzo

One of the dominant themes across financial markets over recent weeks and months was the relentless strength of the US dollar compared to most other major currencies, foremost of which are the euro and the British pound.

In fact, both the euro as well as the British pound have recently slumped to fresh multi-decade lows against the US dollar. Such currency movements must be of interest to many Maltese investors who have exposure to both the US dollar and sterling as part of a diversified portfolio of investments.

Last week, the British pound touched a 37-year low against the US dollar as it traded at a level of USD1.1403 − a level not seen since March 1985. This is only the fourth time that Sterling hit the USD1.14 level since 1972. To place the recent performance into perspective, the value of sterling has fallen by around 14% against the US dollar this year and by 21.5% since the Brexit referendum in June 2016. Until Q3 2021, sterling was trading at a level of USD1.40 against the US dollar.

Meanwhile, against the euro, the British pound has only lost 3.3% this year but has performed much weaker since the Brexit referendum in 2016, with a decline of over 13%. On its part, the...