GBP/USD under pressure amid risk aversion

Risk aversion continues to weigh on the GBP/USD pair. The pair fell to around 1.1897, the lowest level since March 2020. It remains under pressure around 1.1900. the pair seems unable to find support as markets generally fall.

Fears about global recession and a worsening growth outlook in the United Kingdom are still dragging the pound lower, in line with many analysts’ forecasts. At the same time, it boosts the demand for the greenback. The DXY is trading at the highest level since 2002, at 106.70, up 1.46% for the day.

Equity prices in Wall Street are falling 1.70% on average. The FTSE 100 dropped almost 3% and the DAX 2.75%. Commodity prices are sinking, with gold down 2% and silver 2.95%. Crude oil collapses, falling by 8.50%.

Adding to concerns, Norway just warned that gas exports to the UK could be shut off this weekend. A strike threatens production in the Scandinavian country.

The sterling is among the worst performers of the American session. EUR/GBP has erased daily losses and is back around 0.8600 after falling earlier to 0.8540.

Economic data came in above expectation in the UK and the US. The UK S&P Global Service PMI in June was revised higher from 53.4 to 54.3. In the US, Factory Orders rose by 1.6% in May, surpassing the 0.5% of market consensus. Market participants ignored the numbers. On Wednesday, the FOMC minutes will be released, and on Friday, the Non-farm payroll.