Sterling’s recent run certainly seems to have slowed over recent days, with the Pound struggling to make much of an impact against the Euro or US Dollar this week.
Despite Sterling losing position against the single currency it has found plenty of support around 1.14, with the GBP/EUR pair currently trading close to the high of the day, which remains at 1.1440.
Sterling was putting pressure on 1.16 only very recently and despite the fact it seems to have found a foothold over recent weeks, it continues to struggle to sustain any substantial improvement against the EUR.
Why is Sterling losing ground against the US Dollar?
Looking at GBP/USD and a similar scenario is taking place. Cable rates reached closed to pre-Brexit highs only last month, with the Pound hitting a high of 1.4366. Despite on-going concerns around President Trump’s twitter outburst, his introduction of international trade tariffs and his seemingly flippant attitude to the potential destructive situations in the Middle East and Russia, the Greenback has found plenty of support over recent days.
Whether this has more to do with a dip in support for the Pound, than an overriding confidence in the USD is debatable but either way the Dollar has been well supported. It has moved back below 1.40 against Sterling, hitting a high of 1.3917 earlier today.
Despite the Pound’s positive run of late, the trend so far this year continues to repeat itself. Every time Sterling takes a step forward it seemingly hits a wall and retracts. With news report this week focused on the commons debate over whether the UK will remain part of the customs union, it seems as though Brexit talks are well and truly back in the spotlight.
This could handicap any further advancements for the Pound over the coming days, despite the Bank of England (BoE) alluding to further interest rate hikes this year.