And just like that, GBP's gains this week are wiped..
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| As we suggested a couple of days ago; it was more likely than not that GBP would see a dip rather than continue its fine start to 2026 in the near-term.
The reason is almost solely 'trader' based with the stock market seeing some record highs this week and traders cashing in on their fast winnings ahead of some key US data tomorrow.
Stocks, precious metals, crypto and Sterling are all in the red today.
Over 1,000 companies are suing President Trump over his tariffs last year and the US Supreme Court is planning on releasing its final ruling tomorrow. No-one seems to know what can and will happen here, but expect noise and probably FX volatility tomorrow afternoon.
Also tomorrow is the release of the US jobs report where further confirmation of a cooling labour market is expected. This news would cement further future US interest rate cuts (important news for the Bank of England and therefore GBP too).
The investment bank 'UBS' offered its forecast for the Pound in 2026 yesterday. They expect to see average rates of GBP v USD 1.36 & GBP v EUR 1.12.
Note that UBS has been historically one of the more pessimistic (but credible) forecasters for GBP and so a good anchor to use for those in particular with large exchanges in the pipeline this year.
With no important UK data due for 2-weeks, the Pound will continue to be moved by events elsewhere, as-well-as trying to hold onto the rest of the post-budget relief rally. |
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