The Pound-to-Dollar rate is on course for a return to the flash-crash low set on New Year's Eve, according to analysts at Commerzbank, who say the exchange rate has now broken the back of a shallow uptrend marked out on the charts between January 2017 and the present day.
The Dollar sank to a session low Monday after receiving another blow from the now-beleaguered manufacturing sector, which comes just days ahead of Wednesday's Federal Reserve meeting, which some say could herald an end to the central banks interest rate hiking cycle.
The GBP/USD is trading at around 1.2589 at the start of the new week, after falling 1.13% in the previous week. Studies of the charts suggest that the exchange rate is likely to continue falling over the next five days but we are wary of a bounce in Sterling on domestic politics and the midweek U.S. Federal Reserve meeting.
The Dollar is holding up well despite a dramatic fall in U.S interest rate expectations but commentary from economists at UBS suggests it might only be a matter of time before the greenback succumbs to a bearish market.
The Dollar was trading buoyantly in a risk averse market Friday after retail sales figures for the month of May surprised on the upside, leading financial markets and analysts to question whether they've become too pessimistic in their outlook for Federal Reserve (Fed) interest rate policy.
The Pound will trade on a weaker footing over the coming weeks as markets remain on edge over the seemingly rising probability of a 'no deal' Brexit in October, according to global banking giant MUFG, but technical analysts at Germany's Commerzbank are looking for the exchange rate to make further gains in the short-term.
The Dollar extended earlier gains during noon trading Wednesday even after official inflation figures for the month of May surprised on the downside, although the miss was miniscule when compared with the extent to which markets have become pessimistic in their outlook for Federal Reserve (Fed) interest rate policy.