UK Pound Extends Downward Momentum; GBPINR Surrenders 105 Mark

Published on Dec 06, 2023 17:17

The Great Britain pound extended downward momentum against the dollar as recovery above $1.26 for the pair on the back of dollar pull back was short lived. Weak construction data from UK coupled with financial stability report that highlighted a subdued outlook for global economic growth capped gains in the pair. UK S&P Global/CIPS Construction PMI declined to 45.5 in November against expectations of an improvement to 46.7 from the 45.6 reading in October and also stayed below the 50.0 no-change value for the third month running. The latest reading was the second-lowest since May 2020 and signalled a marked reduction in total industry activity. Meanwhile, the UK�s FSR stated that the overall risk environment remains challenging, reflecting subdued economic activity, further risks to the outlook for global growth and inflation, and increased geopolitical tensions. Financial markets are not expecting further increases in Bank Rate; although interest rates will likely need to stay high for some time to make sure inflation continues to fall, the report further noted. GBPUSD is trading at $1.2584, flat on the day. On the NSE, GBPINR futures tumbled further to settle below the 105 mark. The pair settled at 104.95, down 0.42% on the day.