The GBP/USD pair plunged to its lowest level since November 2023, driven by a surge in demand for the U.S. dollar. The pair fell by 0.5% during Tuesday’s trading session, as persistent dollar strength weighed heavily on the British pound.
The relentless USD buying was fueled by higher U.S. bond yields and expectations of prolonged Federal Reserve tightening. Meanwhile, concerns over the UK’s economic outlook added to the pound’s weakness, with markets factoring in potential headwinds from stagnant growth and inflation risks.
Analysts suggest that the GBP/USD trajectory may remain under pressure unless the Bank of England signals a more aggressive stance to counter dollar dominance. Traders are now eyeing upcoming U.S. economic data and key UK policy statements for further direction.
With the dollar showing no signs of easing, the GBP/USD pair is likely to face continued downward momentum. Near-term support levels could be tested if current trends persist, raising concerns for sterling bulls.
