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The GBP/USD has dropped below 1.1900 on the market’s prevalent risk aversion, with the first US trading session of this week.
Risk aversion prevails amid a light calendar, but latest remarks by Fed policymakers have given direction to the GBP/USD pair’s performance.
The Pound Sterling fell sharply below the 1.1900 figure in the US session amid risk aversion as China’s Covid-19 crisis worsens, reporting its first related death in six months, increasing worries of lockdowns in the second largest economy. In the last week, hawkish Fed’s stance weighed on investors.
Global equities are around their yearly lows. At the time of writing, the GBP/USD is trading at 1.1816, beneath its opening price by 0.60%.
The economic calendar revealed the Chicago National Activity index that fell into negative territory in October, to -0.05 from 0.17 in September. On the UK front, the Office for Budget Responsibility (OBR) foresees a drop of 1.4% in GDP for 2023, worse than the estimated 1.8% growth in March. Meanwhile, expectations that the Bank of England (BoE) would tighten monetary policy.
