GBP/USD Weakens, Trading Near Three-Month Lows as Dollar Makes Safe Haven Gains

GBP/USD continues to trade weak, although it has recovered slightly after falling to the lowest level in three months on account of gains in

GBP/USD Weakens, Trading Near Three-Month Lows as Dollar Makes Safe Haven Gains

The Pound continues to trade weak against the US dollar, although it has recovered slightly after falling to the lowest level in three months on account of gains in the US dollar as a safe haven currency. At the time of writing, GBP/USD is trading at around 1.289.

A recovery in retail sales in the UK also failed to move the Cable much as markets continued to focus on the economic impact of the coronavirus outbreak around the world. The US dollar has strengthened to a near three-year high over rising uncertainty about the fate of the global economy as a result of the outbreak.

Meanwhile, Brexit-related uncertainties also weigh on British markets and on the currency after Britain and the EU appeared to be hardening their stances ahead of the next round of negotiations. So far this week, GBP/USD has lost around 1.4% of its value, erasing all the gains after Sajid Javid stepped down and Rishi Sunak was appointed as the next finance minister.

Although markets still remain hopeful that the government could unveil fiscal stimulus measures, the possibility of a rate cut by the BOE is on the rise. Markets are now anticipating an 80% likelihood of the Bank of England cutting interest rates by 0.25% in December this year.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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