Pound Under Pressure, Dollar Strengthens
The pound sterling weakened again against the US dollar during Friday's trading (August 7). The GBP/USD pair fell for the second consecutive day, hovering around the 1.3450 level, as fundamental support for the British currency began to wane.
Pressure mounted following a narrowing of the yield spread between UK and US bonds. This dynamic made pound-denominated assets less attractive compared to the US dollar.
Rising oil prices also weighed on the UK. While costlier oil can keep inflation elevated, it simultaneously slows economic growth, raising concerns about stagflation.
This situation presents a dilemma for the Bank of England. The central bank needs to curb inflation, yet further interest rate hikes risk exacerbating the UK's economic slowdown.
Meanwhile, the US dollar found support in the rising demand for safe-haven assets. Tensions in the Strait of Hormuz escalated again after Iran considered banning US and Israeli vessels and imposing fines of up to 20% of cargo value.
Newsmaker Analysis: The GBP/USD pair remains under pressure as long as the dollar strengthens and oil prices stay high. The 1.3400 level serves as a key support point, while a recovery toward 1.3500 would require a weakening dollar or an easing of tensions in the Strait of Hormuz. (asd)
Source: Newsmaker.id
