Pound Sterling Weakens, Dollar Remains Dominant
The pound sterling moved within a limited range against the US dollar in recent trading, with the GBP/USD pair remaining in the 1.24–1.25 range amidst the dollar's continued dominance. This movement reflects the cautious attitude of market participants, who are still awaiting clarity on the direction of global factors and monetary policy.
From a fundamental perspective, the strengthening US dollar remains the main pressure on the pound. Demand for the dollar has increased as geopolitical uncertainty, particularly related to conflicts in the Middle East, has prompted investors to turn to safe-haven assets.
Meanwhile, sentiment towards the pound has also been restrained by expectations of a more cautious Bank of England policy stance. Although inflationary pressures in the UK remain relatively high, the market is beginning to see limited room for further interest rate hikes in the near term.
On the other hand, tensions in the Strait of Hormuz, which have impacted energy prices, have also increased the risk of global inflation. This situation has made market participants more selective and tended to hold positions, thus limiting GBP/USD movements in the short term.
Causes:
The US dollar remains strong (safe haven demand)
Global geopolitical tensions
Bank of England expectations are more dovish
Energy prices are rising. (Zaf)
Source: Newsmaker.id
