The British pound records its lowest level in 5 months

The British pound continued its losses to a level of 1.24 dollars, reaching its weakest level since November 16,
as investors absorbed the latest UK jobs report and the US dollar remained supported by expectations
that the Federal Reserve will maintain higher interest rates for an extended period.
Recent data revealed an unexpected increase in the UK unemployment rate to 4.2%, surpassing the expectations of 4.0%, while wage growth continued to slow gradually.

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The British pound

Dollar

Oil

The British pound

Recently, traders have adjusted their expectations regarding interest rate cuts by the Bank of England and the Federal Reserve this year, driven by strong inflation data from the United States.
It is now expected that the interest rate will drop to around 4.75% by the end of 2024,
down from the current 5.25%, representing a shift from previous expectations of a decrease to 4.5% by December.
Last week, policymaker Megan Green confirmed that interest rate cuts in the UK should remain distant,
noting a greater threat of continued inflation in the UK compared to the United States.

Dollar

The dollar rises to its highest level since last November.

The dollar index rose for the fifth consecutive session towards 106.4 today,
Tuesday, hovering at its highest level in more than five months,
as US retail sales data that came in higher than expected boosted bets
that the Federal Reserve (the US central bank) will delay the start of the monetary easing cycle.
Retail sales rose 0.7% on a monthly basis in March, while retail sales excluding cars increased the most in 14 months, confirming strong consumption despite tough financial conditions.
The markets now see the Federal Reserve’s first interest rate cut in September,
much later than the previous expectations in June.
Looking ahead, investors will assess US building permits, housing construction data,
and industrial production on Tuesday for more insights into the economy.
The dollar rose to its highest levels in several months against most major currencies,
and reached its highest level in 34 years against the Japanese yen.

Oil

Oil falls for the second consecutive session.

Brent crude futures fell below $90 per barrel for the second consecutive session as traders awaited Israel’s response to the recent Iranian attack.
Military leaders of the entity emphasized the need to respond, while European and American officials urged caution.
Focus now shifts to the type and timing of the next step. Western and Arab countries advise Prime Minister Benjamin Netanyahu not to respond harshly.
The Middle East represents a third of global oil supplies, and Iran is one of the main producers in OPEC,
producing more than 3 million barrels per day.

The British pound records its lowest level in 5 months

The British pound records its lowest level in 5 months

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