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Sterling Struggles As Risk Averse Mood Continues

Sterling Struggles As Risk Averse Mood Continues

The British Pound will remain under pressure against the euro and dollar but advance against the Australian and New Zealand Dollars should this week’s selloff on global equity markets extend into the final weeks of August.

The pound was this week sold against the euro, dollar, franc and yen amidst a broad decline in investor sentiment that is linked to fears of a global growth slowdown owing to the spread of the Delta variant and expectations the Federal Reserve is preparing to withdraw stimulus with the UK currency falling yesterday to monthly lows of 1.1680 against the Euro and 1.3630 against the dollar. The only releases of note yesterday came from the US with Initial jobless claims falling to a post-Covid lows of 348k.

The softer tone to sterling over the past 24 hours sees GBP/EUR opening this morning up around the 1.1655. GBP/USD was seen changing hands down in the bottom half of 1.36 whilst the EUR/USD continues to operate below the 1.17 handle. A sparse macro calendar for the rest of the day indicates the potential for a quiet end to the week.

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