GBP/USD extends decline, eyes 1.3000

GBP/USD dropped under 1.3040 and printed a fresh 31-year low at 1.3019 as the US dollar gained across the board. The pair remains under pressure, near the lows and closer to psychological 1.3000 area.

Greenback gained momentum in the market while stocks in the US and Europa are falling. The Dow Jones is falling 0.70% and the Nasdaq drops 0.85%. In Europe, main stock indexes ended with a decline of around 2% while the FTSE 100 was the exception and gained 0.35%, boosted by Carney’s speech.

Will the decline stop at 1.30?

According to Currency Strategy at Brown Brothers Harriman the 1.30 has psychological importance and “a break would spur calls for 1.25 on the way to 1.20.”

Mark Carney said today that the decline in the pound would be favorable to exports but analysts from BBH consider that the depreciation of the pound “feeds through into inflation considerable faster than it will boost the competitiveness of UK manufacturing exports.”