The GBP/USD pair extends on Friday its losses for the fourth straight day, poised to finish the week down more than 2% as political turmoil in the UK and increased speculation that Prime Minister Keir Starmer’s successor could widen fiscal deficits weigh on the currency.
At the time of writing, GBP/USD trades at 1.3343, its lowest level since April 8
GBP/USD drops as Starmer pressure and Oil shock deepen Risk aversion dominates the financial market as US President Donald Trump said that he is not happy with Iran. “I am not going to be much more patient,” he added, pressuring Tehran to make a deal. The US crude Oil benchmark, West Texas Intermediate (WTI), extended its gains by more than 2.39%, while the Greenback —positively correlated to WTI—surged to a four-day high at 99.29, according to the US Dollar Index (DXY), up by 0.39% in the day. However, the story is that the Iran conflict is underpinning energy prices.
Consequently, global bond yields are soaring amid speculation that major central banks, including the Federal Reserve, will begin to tighten monetary policy. Prime Terminal data shows growing expectations that the Federal Reserve will raise rates in 2026, with the probability of a hike by year-end now at 50%. Data from the US showed that Industrial Production improved in April, rising 0.7% MoM, exceeding estimates of 0.3% and March’s -0.3% contraction.