The Pound steadied overnight against the USD after heavy losses. Yet the currency still trades below the psychological level of 1.30 and could give further way to the downside. The sterling came under renewed pressure after data showed Britain’s economy grew at its weakest annual pace in more than seven years in November, raising the chances of a cut to interest rates.
Further negative momentum may be seen after the BoE actually gives more clues on whether it plans to slash its key interest rates sooner rather than later. Meanwhile, the trade talks between the UK and the EU have just started and might lead to increased volatility. Technically, the support level from the past two months has been broken so we may see more GBP losses in the near future.