GBP/USD Forecast: Pound Sterling could extend slide in case 1.2630 turns into resistance
Pressured by the broad-based US Dollar (USD) strength, GBP/USD turned south and declined to its lowest level since mid-December near 1.2600 on Tuesday. Although the pair recovered toward 1.2650 early Wednesday, the technical outlook suggests that the bearish bias remains unchanged.
The decisive rebound seen in the US Treasury bond yields helped the USD outperform its major rivals on the first trading day of 2024. Additionally, the negative shift seen in the risk mood, as reflected by falling US stocks, forced GBP/USD to stay on the back foot. Read more...
Pound Sterling struggles for a firm footing as investors’ risk-appetite fades
The Pound Sterling (GBP) searches for a potential cushion after Tuesday’s intense breakdown. The GBP/USD pair was beaten down after investors reconsidered the positive sentiment underpinning the rally in risk-sensitive assets. In addition to that, deepening recession fears and a vulnerable manufacturing sector in the United Kingdom economy have dampened appeal for the Pound Sterling.
A major factor of the outperformance by the Pound Sterling against the US Dollar was the expectation that the Federal Reserve (Fed) would start reducing interest rates earlier than the Bank of England (BoE). However, the UK’s gloomy outlook, due to deepening business pessimism amid escalating cost-of-living crisis, may force BoE policymakers to reconsider their stance of keeping interest rates elevated for a longer period. Read more...
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