Pound Sterling Falls Amid Dollar's Mixed Fortunes
The pound sterling fell on Wednesday while the euro remained flat as the dollar found some support after a previous session's softness. The US dollar index slipped 0.05% to 1.3534, and the euro was steady at 1.1625.
Currency markets are focusing on the dollar's failure to capitalize on supportive fundamentals, said Chris Turner, Global Head of Markets and Regional Head of Research for UK & CEE at ING. He noted that higher energy prices due to an escalation in the Gulf will direct more trade flows towards the US, yet the greenback has failed to rally.
The dollar's weakness is attributed to a fragile US economy and global macro hedge funds positioning for a downside break of 150 over the coming months, according to Turner. The negative correlation between elevated global equities and the dollar is also a headwind.