Pound Slumps on Chip Fears and UK Uncertainty
The British Pound has taken a hit in value against the US Dollar as risk aversion takes hold, despite the Greenback being flat for the day. The move is attributed to concerns over chipmaking machinery production by a Chinese state-backed company, which has put pressure on ASML, a Dutch-based firm.
GBP/USD retreated from its high of 1.3363 to trade at 1.3305, with Sterling slipping 0.13% in value despite the Dollar's lack of movement. The Pound is expected to remain under pressure as investors await the Federal Reserve's monetary policy meeting, where rates are likely to be kept unchanged.
The Bank of England (BoE) is also set to hold its interest rate at 3.75%, despite a jump in oil prices in July. Meanwhile, the new UK government led by Prime Minister Andy Burnham is causing uncertainty for investors.