The British pound remains under pressure, struggling to hold above 1.2400 against the U.S. dollar as broad-based dollar strength weighs on the currency pair. Investors have been favoring the greenback amid rising expectations for higher U.S. interest rates and growing concerns over the global economic outlook.
The dollar’s momentum comes as Federal Reserve officials maintain a hawkish stance on monetary policy, signaling that interest rates may remain elevated longer than previously expected. This has bolstered demand for the U.S. currency, making it harder for GBP/USD to find support despite signs of resilience in the UK economy.
Sterling’s weakness is also linked to mixed domestic data and lingering uncertainty surrounding the Bank of England’s policy path. While inflation in the UK remains stubbornly high, policymakers face a balancing act between curbing price pressures and preventing further economic slowdown. Traders are looking for stronger signs from the BoE before making bullish bets on the pound.
At the same time, risk sentiment remains fragile, with global markets reacting to geopolitical tensions and economic slowdowns in key regions. This has driven investors toward safe-haven assets, adding further pressure on risk-sensitive currencies like the pound.
With GBP/USD failing to reclaim key resistance levels, technical indicators suggest further downside risks if the pair remains capped below 1.2400. A break lower could open the door for a test of recent support zones, while any rebound will depend on a shift in market sentiment or a correction in the dollar’s rally.
For now, traders are watching upcoming U.S. economic data and any fresh policy signals from the Federal Reserve. Until then, the pound’s recovery remains limited, with the dollar dictating the near-term direction of the currency market.
