- The Bank of England follows developments in the financial markets.
- The pound remains under pressure and continues to look for support.
- GBP/USD is back below 1.0700 and heading for a close low.
The pair GBP/USD it is at the lowest level since the European session after the Bank of England statement and also in the midst of risk aversion. Cable has re-entered negative territory and is trading around 1.0660, down nearly 200 points from Friday’s close.
In Asian time, the pound suffered a historic drop to 1.0315, an all-time low, and then rebounded 600 points. The recovery lost momentum and GBP/USD is under pressure again.
The sharp depreciation of the pound weighed on global market sentiment on Monday and also prompted a statement from the Bank of England. The central bank said it is closely monitoring developments in financial markets and welcomed the government’s commitment to sustainable economic growth. The comments did not help the pound, which lost momentum afterwards.
Equity markets also turned lower in recent hours, also affecting the pound, which has become more sensitive to risk aversion. On Wall Street, the Dow Jones falls 1.05% and the Nasdaq 0.43%.
Technical levels
Source: Fx Street
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