GBP/USD outlook: Cable falls to multi-decade lows as downbeat UK data add to negative outlook
Sterling falls further on Friday and breaks below 1.14 mark vs dollar, trading at the lowest levels since 1985 during the European session.
In addition to persisting pressure from strong dollar on expectations for another massive Fed rate hike, pound was driven lower on Friday by much weaker than expected UK retail sales, which dropped by 1.6% in August after 0.4% rise in July and also well below forecasted 0.7% fall. ‘
August drop is the biggest since December 2021and adds to warnings that the economy is sliding into recession, as consumer spending is getting squeezed more on soaring cost of living. Read more…
GBP/USD has dropped to its lowest level since the 1980s
The British economy has had very turbulent years, including the British pound situation. An exit from the European Union may have undermined the British currency’s authority, and then the British economy was hit by the pandemic. The British Isles may have a severe energy crisis and high inflation.
Since the beginning of this year, the British pound has lost over 15% of its value against the US dollar. That makes the GBP the second weakest currency in the world of major currencies, right after the Japanese yen, losing over 19%. Additionally, if the 2014 peak is taken as a reference point, the loss of GBP against USD may be around 30%. Consequently, the market has reached levels that were last seen in 1985. Read more…
GBP/USD: Charts point to a test of the all-time low at 1.0520 – BBH
Sterling is underperforming after weak retail sales data and traded near 1.1350, the lowest since 1985. Economists at BBH note that the GBP/USD pair could plummet to the all-time low at 1.0520.
“Headline sales fell -1.6% MoM vs. -0.5% expected and a revised 0.4% (was 0.3%) in July, while sales ex-auto fuel also fell -1.6% MoM vs. 0.4% in July. As a result, the YoY rates fell to -5.4% and -5.0%, respectively. The data confirm what we all know already, and that is the economy is sliding into recession. How long and how deep this downturn will remain a great source of debate.” Read more…