The British Pound had a rough start this week, significantly slipping in value against the United States Dollar, going all the way down below $1.30. This was the fourth day in a row losing for the GBP/USD pair, as there are still a lot of fears in the market.
Getting a bit into details, the forex market for the GBP had been really desperate to maintain the value over the $1.30 mark, after three consecutive days of losses. The best example is early Monday morning trading when everything pointed in one direction. And this was the moment when the pound began slipping further.
The US – Iram conflict, still affecting assets
Analysts observed during the last days the weakness of the United States Dollar, which otherwise has gone unnoticed. What’s interesting is that after the U.S. Government revealed weak unemployment data, as well as a declining wage growth figure of 0.1% last week, a lot of people were looking forward to seeing the GBP gaining some momentum. Still, it wasn’t the case. On the contrary, it went down, going under a psychological point in the next period.
Globally, a general uncertainty has been observed on the forex market, following the events and tensions between the United States and Iran. As expected, this resulted in a lot of pressure on oil prices, but also the forex market. Obviously, with the UK being one of the U.S.’ top allies, it couldn’t escape.
The entire situation put pressure on the GBP forex market, otherwise impacted by many geopolitical hurdles over the past months, especially as a result of the Brexit debacle.
Such concerns, despite what can be considered a short-term lift, as a result of the conservative election victory, will not shift at all. Recently, Irish Deputy Leader Simon Coveney warned England won’t leave Brexit before the December 31st deadline.
Could this be the final straw for sterling?
Monday’s numbers revealed that despite the economic growth, the GDP had fallen by 0.3 percent in November 2019. At the same time, analysts expressed their disappointment regarding these figures which weren’t exactly expected for the nation.
Finally, all these factors led to increased talks regarding what seems to be an imminent interest rate cut from the Bank of England. Naturally, this would help to provide a small amount of positivity, while also swinging marketing sentiment back to a positive side!