Will The Queen’s Death Affect The U.S. Economy?
Queen Elizabeth II died last week, setting off a new era for the U.K.
At 96 years old, QEII’s seven-decade reign was the longest in the U.K.’s history, and her death, according to experts, marks a time of economic uncertainty for the country.
“The Queen died peacefully at Balmoral this afternoon,” Buckingham Palace said in a statement.
Her son, now King Charles III was named as the new leader of the monarch just hours after her death and economic changes are already being felt within the country. For one, the U.K.’s new prime minister Liz Truss is responsible for fixing an embattled economy prompted by 2016’s Brexit. Immediate plans includes tackling high cost of living rates, and a stimulus package to quell rising energy bills prompted by the Ukraine crisis.
So, what does this have to do with the US?
CNBC recently reported the pound fell against the U.S. dollar and the euro last amid tumultuous trading following Queen Elizabeth.
“There’s no significant impact on the pound,” Amo Sahota, director of FX consulting firm Klarity FX in San Francisco told CNBC in an interview.
“The Queen was clearly an icon in British culture, but politically very little significance,” he continued. “There are going to be questions around the prime minister. It’s a government that is in transition anyway. But it won’t have any bearing on the economy.” In fact, Essence reported in July that the recent drop in the U.K.’s currency is good news for US residents, particularly those aiming to travel across the pond soon.
A scenario where the euro is trading below the US dollar between $0.95 to $0.97 could “well be reached if both Europe and the US find themselves slip-sliding in to a (deeper) recession in Q3 while the Fed is still hiking rates,” wrote Deutsche Global Head of FX Research George Saravelos as reported by CNN.
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