- The pair continues its fourth consecutive day of losses
- Iran tensions still at the forefront of concerns
- Further hit by weak UK GDP figures release
The current tumultuous fortune of the British Pound has continued on Monday with the currency further slipping in value against the US Dollar. At the time of writing, the pair sit at a very low ebb having sunk below $1.30. This marks the fourth consecutive losing day for the pair as fears in the market continue to mount. Geopolitical as well as economic concerns have all converged in something of a perfect storm for the GBP forex market of late.
Yet another down day for Sterling
Put bluntly, the GBP forex market had been desperate to stay above the milestone $1.30 mark following three consecutive days of loss-making. The early trading on Monday however, all pointed in one direction. This was, unfortunately, the wrong one for the pound as it slipped further.
It seems that in recent days, even the relative weakness of the US Dollar on the other side of the trade has gone unnoticed by the market. After the Americans had posted weak employment data and a declining wage growth figure of 0.1% on Friday, many may have expected the Pound to pick up the slack. This has not been the case though. Instead it has retreated below what could be a psychologically significant point in the coming period.
Iran relations a key factor
Following the Iranian retaliation on US bases in Iraq last week, there has been global uncertainty surrounding the stability in the Middle East. This has applied pressure to both the global oil price and to major forex markets. As a key ally of the United States, the UK has no escaped from this situation.
This has furthered heaped pressure on a GBP forex market that has seen more than its fair share or geopolitical hurdles in recent months thanks to the ongoing Brexit debacle. These concerns, despite a short-term lift following the resounding conservative election victory, just will not shift. Irish Deputy Leader Simon Coveney has become the latest to express doubt that the December 31st transitional deadline to completely leave the European Union.
Poor GDP figures the final straw for the Pound
A miserable Monday for GBP trading was compounded as early as 10 am GMT when poorer than expected November GDP numbers were released for the British economy. These showed that while the overall economy had grown, the GDP had fallen 0.3% in November. Analysts have been disappointed by these figures which were not expected to show any losses from the nation’s GDP.
All of these factors have given rise to increased talk of an imminent interest rate cut from the Bank of England. This would certainly help to provide some much-needed positivity and hopefully swing market sentiment back to the positive side as we head forward into 2020.
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