GBP Experiences Worst Run in 12 Months
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Daily Currency Update
The pound is on the verge of its longest losing streak in nearly a year, heading for its fourth consecutive weekly decline against the US dollar. This marks its worst performance since last September.Over the past month, sterling has dropped by two and a half cents against the US dollar, as investors seek safe-haven assets amid escalating market uncertainty. The sustained downward pressure on the pound reflects mounting concerns over global economic stability and the likelihood of further monetary tightening by the Federal Reserve, which has enhanced the US dollar’s appeal.
Last week, the Bank of England's interest rate cut, coupled with the expectation of one or two additional cuts later this year, has significantly weakened the pound. The decision to lower rates, driven by fears of slowing economic growth, has led investors to reassess the currency’s prospects, contributing to its recent slide. This shift in monetary policy has amplified market expectations of further easing, keeping the pound under considerable pressure.
Key Movers
Markets have experienced a highly turbulent week, primarily due to unexpectedly weak US payroll figures released last Friday. The disappointing jobs data heightened fears of an economic slowdown, leading to a sharp decline in global stocks as investors reassessed the strength of the US economy.This sudden shift in sentiment triggered a flight to safe-haven assets like the US dollar and government bonds, as investors sought to shield their portfolios from potential market volatility. Consequently, currencies such as the euro and the pound came under increased selling pressure, weakening against the dollar, which gained from the surge in demand for safety. This wave of economic uncertainty has caused significant fluctuations in currency markets, leaving risk-sensitive currencies particularly exposed as traders brace for further instability.
Expected Ranges
- GBP/USD: 1.2725 - 1.2795 ▼
- GBP/EUR: 1.1655 - 1.1715 ▼
- GBP/AUD: 1.9325 - 1.9415 ▲
- EUR/USD: 1.0885 - 1.0965 ▲