The dollar soars to 37-year high against sterling

The strong U.S. dollar surged to a 37-year high against sterling and a 24-year peak against the yen.

Sterling fell 0.64% to $1.145 on Wednesday afternoon, plunging the currency to a level not seen since 1985, as the Bank of England said a weaker outlook for the U.K. economy, and a stronger U.S. currency, were the culprits.

Britain’s new prime minister Liz Truss has vowed to cut taxes and reach a deal to face a growing national energy crisis among problems created by Brexit.

In Asia, the U.S. currency soared as high as 144.99 yen, breaking the barrier for the first time since August 1998. The dollar was last up 1.1% at 144.305 yen, climbing 4.2% from 138.96 yen just since the end of August.

A hawkish Federal Reserve appears to be on a path to raise interest rates by another 0.75 percentage point this month, determined to bring down inflation to its 2% inflation target.

Also on Wednesday, the Bank of Canada hiked interest rates by 0.75 percentage point to a 14-year high and said the policy rate would need to go even higher.