The pound sterling was in for another difficult day yesterday as it continued to lose ground against both the USD and EUR. GBP headed to 1.2260 against the US dollar, the lowest since June 2020 as the Bank of England’s growth outlook dampened the pounds prospects. GBP/EUR has lost nearly 2% since last Thursday after three consecutive days of losses, shifting the rate well under 1.1700. The EUR has managed to steady itself against the USD after it’s initial fall from 1.0800 to a low of 1.0480, having remained close to the mid 1.0500’s since the end of April.
The GBP continues to struggle as global risk-off sentiment continues. Investors continue to hold the safe-haven USD as global inflation and the impact of the conflict in Ukraine weigh on risk sentiment globally. UK GDP also remains in investors’ minds, weakening the pound as it’s likely to slow to the worst performing in the G7 in 2023.
EUR investors will have eyes on the Euro ZEW Business Confidence survey released at 10:00am. Data is otherwise light for the day though we will see speeches from members of the BoE at 14:00 GMT and US Federal reserve at 14:15, 18:00 and 20:00 in which investors will look for further hints on the central bank’s economic outlooks.
Have a great day.
Thomas Read, Senior Relationship Manager.
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