The British pound fell about four percent against the US dollar in a short period of time on Sunday night, before partly recovering.

On Friday, the new British Finance minister Kwasi Kwarteng presented a controversial package of tax cuts, and on Sunday Kwarteng told the British BBC that further cuts will be implemented. Currency investors were able to react to these latest developments last night.

Shortly after the start of currency trading, the pound fell against the dollar from 1.0806 to 1.0373 in the space of 15 minutes. Over the next few hours, the pound/dollar recovered to 1.0608. A similar pattern was visible against the euro.

British Minister Kwarteng presented an extensive package of tax cuts to boost the economy, now that inflation is around 10 percent and purchasing power is eroding.