Pound Sterling stays weaker near 1.3500 as safe-haven demand lifts US Dollar

The Pound Sterling remained under pressure near 1.3500 against the US Dollar as heightened safe-haven demand boosted the greenback amid renewed global risk aversion. The shift in market sentiment, driven by escalating geopolitical tensions and weaker-than-expected UK economic data, strengthened demand for the US Dollar as investors reduced exposure to higher-risk assets. This dynamic has widened the US-UK yield differential, further undermining the Pound, particularly as the Federal Reserve maintains a relatively hawkish stance compared to the Bank of England’s cautious approach. GBP/USD is particularly exposed to shifts in risk appetite and relative monetary policy expectations, with limited near-term catalysts to reverse the downtrend. Traders will closely watch the upcoming US Non-Farm Payrolls report for further clues on the Dollar's trajectory and its impact on cross-currency flows.

The British Pound (GBP) reacts sharply to Bank of England Monetary Policy Committee decisions, UK CPI and GDP releases, Gilt yield moves, and domestic political events. Cable (GBP/USD) is one of the most news-sensitive forex majors.

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