GBP/USD: The British pound may resume its decline

Pound Outlook Remains Bearish Despite Recent Recovery

The pound could resume its fall after successfully erasing all its losses caused by new Prime Minister Liz Truss’s tax plan on 23 September. GBP/USD rose to $1.15, after falling to a record low of $1.03 a fortnight ago, on the back of the UK government’s cut in property tax income for the wealthy. The government canceled the tax break for the wealthy, which had been the subject of controversy and raised concerns among market players about the sustainability of the debt.

However, the pound may resume its decline against the dollar due to the still very strong headwinds. Indeed, the pound, like the euro, remains punished by the massive monetary tightening by the Fed, the global economic slowdown and the energy crisis in Europe. These last two factors push operators towards safe haven currencies such as the dollar and, to a lesser extent, the Swiss franc.

GBP/USD Daily Price Chart – Key Levels


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