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I confirm my intention to proceed and enter this websiteThe British pound sank on Thursday to a level it has not seen for nearly nine months against the US dollar as the latter’s position remained strong waiting for the alteration of internal policies from the soon to be President Donald Trump. The pound had given up 1.09 percent to trade at 1.2376, which is also the lowest since April 2024.
(GBP/USD Daily Price Chart, Source: Trading View)
Also, the mere anticipation of Trump’s administration policies is expected to create more business opportunities and increased internal demand resulting in a higher inflation rate, for which the Federal reserve is not ready to cut interest rates in big amounts. This trend supports the yields in US Treasury securities and increases the purchasing power of the dollar.
The bigger slide in the dollar this time round was a reversal of last year’s fortunes when it was the pound that performed better than most currencies in the G10 dollar space. Higher inflation and better economic conditions early in the year saw the BoE take a more cautious approach to rate cuts than other central banks.
If the British economy continues to contract in the ensuing months, and if the British central bank indicates willingness to cut rates aggressively, the pound is likely to come under additional selling pressure. But so far, the UK central bank authorities have not signalled any intent to move away from their prudential and gradual approach regarding changes to the monetary policy.
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