The British pound begins the week on the wrong foot, spurred by geopolitical jitters and Brexit.The market mood is downbeat as Ukraine-Russian tensions keep arising.
Odds of the BoE’s hiking 50 bps are at 50%, per money market futures.
Money market futures have priced in 100 bps of rate hikes of the Federal Reserve.The GBP/USD snaps two days of gains and begins the week on the wrong foot amid increasing geopolitical tensions in eastern Europe. At the time of writing, the GBP/USD is trading at 1.3528.
The market sentiment is downbeat, depicted by European bourses falling, while US futures point to a lower open. The Ukraine – Russia tensions still weigh on market players’ risk appetite, as uncertainty in talks, and mixed messages crossing the wires, keeps some investors at bay, while others have turned to safe-haven assets. In the FX market, the gainers are the USD, JPY, and CHF.
An absent UK economic docket left GBP/USD traders adrift to geopolitical events and Fed speakers on Monday.
GBP/USD tests 1.3500 as safe-haven flows dominate markets.GBP/USD stays under bearish pressure and trades at its lowest level in a week near 1.3500 on Monday. Heightened fears over a military conflict between Russia and Ukraine force investors to seek refuge, allowing the dollar to outperform its risk-sensitive rivals.