Pound Suffers 1% Decline Against US Dollar

Surfing on buoyancy provided by positive manufacturing data, the US dollar reached the highest level since June 2002, pushing the GBP/USD ratio down to 1.22340, as bears fail to loosen the grip maintained on the ratio which has pushed the pound into a 5-week losing streak against the dollar.

The dollar also rose significantly against the Japanese yen, Turkish lira, euro, Swiss franc and British pound, despite analysts and traders considering the potential of multiple 2017 rate rises a distinct possibility. The minutes from the Feds December meeting are to be released on Wednesday, with traders awaiting any palpable notion of an early 2017 rate increase.

Despite the potential of a rate increase to weigh down the dollar’s charge, it shows little sign of retreating greatly against European currencies. With an election season awaiting many European leaders in 2017, the euro is predicted to suffer moderate to significant drops.

Although the chance of euro volatility may be reduced, as establishment parties across Europe continue to fight to reduce the rise of populist parties, particularly in Germany and France, which have seen a sharp increase in support for populists, particularly over 2016.

Continuing its decline into 2017, the pound fared poorly over the previous year. With the shock of Brexit pushing it down against almost all major currencies, and the chance of recovery ebbing further away, as it begins to thunder every closer towards the 1.20000 barrier. The positive US manufacturing date has provided another reason for bears to push the pound down further.

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