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19/06/26
23
GBP/USD Falls to Lowest Level Since April on UK Political and BoE Concerns
The GBP/USD pair extended its decline for a third consecutive session on Friday, slipping further below 1.3200 and reaching its weakest level since April during Asian trading. The move leaves the pair on course for a sharp weekly loss, with the broader setup still favoring additional downside in the near term.
Sterling has continued to underperform as domestic political uncertainty weighs on sentiment. That pressure intensified after reports that Greater Manchester Mayor Andy Burnham won a parliamentary seat in northern England, opening a possible route to challenge Prime Minister Keir Starmer. The result has added to concerns over the stability and direction of British politics at a time when confidence in the currency is already fragile.
At the same time, expectations for further aggressive tightening by the Bank of England have eased after softer UK inflation data earlier in the week. With energy-price risks also reduced following a US-Iran peace deal, markets appear increasingly convinced that the central bank may keep rates unchanged for longer. That view has removed some support from the pound and strengthened the case for continued weakness.
The US dollar has remained firm near its highest level since late March, supported by the Federal Reserve’s more hawkish tone and the prospect of at least one more rate increase by year-end. The combination of a stronger dollar and a weaker pound has kept GBP/USD under sustained pressure, especially after the pair retreated from the weekly high near 1.3460.
Geopolitical tensions remain an additional source of support for the dollar. The cancellation of a planned US-Iran meeting in Switzerland and renewed Israeli air strikes in Lebanon have raised doubts about the durability of the peace deal. In this environment, any rebound in GBP/USD may attract renewed selling interest, with market participants now turning to UK retail sales figures for the next potential catalyst.
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