The pound sterling loses strength in the Forex market, now that risk appetite is declining among investors.
The British economy has been the most happening of the year and its currency is the same. Since, the political environment in the UK has not favored the pound’s performance.
Thus, many analysts believe that the performance of the pound will continue in this way. The economic outlook for the United Kingdom does not seem to want to improve in the future to come.
The pound sterling loses ground and continues on difficult roads
The Brexit issue has wreaked havoc beyond expectations. For since the UK made this independence decision, investors looked uncertainly at the British currency on the Forex market.
But now, Brexit is not the only thing that has affected the British currency. The British country has suffered since the economic blockades started due to the pandemic in Europe.
In addition to this, British analysts promised that the pound would improve its performance once the government lifted blockages in the service sector in England.
“We still believe that in the future the UK faces problems and we believe that the economy will fare worse than others in Europe.”
Rony Nehme, chief market analyst at financial research firm Squared Financial.
However, this greatly multiplied the cases of contagion in the British country. Dismissing thus, the possible good performance of the pound.
A further fall in the British currency
The pound sterling loses ground and fell on Thursday when risk aversion spread among investors in the Forex market, slightly increasing the attractiveness of the US dollar.
However, the dollar has not improved its performance, since, in the last two weeks, the US currency has performed negatively compared to past moments in the pandemic period.
Furthermore, optimistic Chinese growth data failed to lift investment sentiment.
Well, the increase in political tensions between China and the US, coupled with the weak performance of the Chinese economy to really achieve the economic lift they promise, did not generate enough confidence.
In the case of the Pound, one of the relevant factors that caused this drop was the publication of the employment payroll figures of British companies. The number of employees decreased by 649,000 from March to June.
But the biggest falls occurred at the beginning of the economic blockade by the coronavirus. People on payrolls fell by more than 74,400 in June, compared to 450,000 in April and 124,000 in May.
In addition to this, the British gross domestic product data for May increased less than expected.
Thus, investors wonder whether the fiscal stimulus measures already announced, and discussions of economic deals with the EU will be enough to shore up the British economy.
Quotation of the Pound Sterling to date
At the time of writing, the British pound was trading at its GBP / USD $ 1,259 pair. The pound has been under pressure as the dollar is trying to rebound due to a decrease in risk appetite.
In summary, although the pound seems to remain within its weekly range in the Forex market, analysts believe that more moments of declines in the performance of the British currency are coming.