Pound Advances As PM Liz Truss Finalizes Energy Support Package
06 September 2022 - 12:47PM
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The pound climbed against its most major counterparts in the
European session on Tuesday, as U.K. Prime Minister Liz Truss is
considering a support package worth 40 billion pounds in order to
help businesses to lower their energy bills.
The new government is considering two proposals, which include
placing a cap on wholesale gas prices.
The other plan is a percentage or unit price reduction offered
by energy suppliers to firms.
According to reports, the plan would cap average annual
household energy bills at or below the current level of £1,971.
The plan is likely to be announced this month and could be
enforced in October.
Survey data from S&P Global showed that the UK construction
activity shrank for the second successive month as cost pressures
and economic uncertainty dampened demand.
The Chartered Institute of Procurement & Supply construction
Purchasing Mangers' Index unexpectedly rose to 49.2 in August from
48.9 in the previous month. The reading was forecast to fall to
48.0.
The pound firmed to 164.58 against the yen, its highest level
since July 28. If the pound rises further, it may find resistance
around the 166.00 level.
The pound was higher against the euro, at a 1-week high of
0.8566. The currency is likely to face resistance around the 0.84
region.
The pound climbed to a 4-day high of 1.1379 against the franc
and held steady thereafter. At Monday's close, the pair was worth
1.1276.
In contrast, the pound retreated to 1.1493 against the dollar,
from a 5-day high of 1.1609 hit at 2:45 am ET. Immediate support
for the currency is seen around the 1.13 level.
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