Pound value: Sterling bombs at market close as Bank of England to withdraw key bonds

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As of 7.30pm on October 11, Sterling is still in recovery, having gained against the dollar.

The rebound has carried the currency upwards by 0.007 percent to $1.113. 

While this is encouraging for the UK, traders believe risks remain as people navigate the Chancellor’s economic policy. 

Diego Colman, a strategist with foreign exchange firm Daily FX, the mini-budget could continue to create a “headwind”.

He wrote: “From a fundamental standpoint, uncertainty about the UK’s fiscal-monetary policy mix will remain a headwind for sterling in the near term despite today’s price action, prompting investors to demand a higher risk-premium on UK assets. This should exert downward pressure on cable over time.”

Mr Colman added that recovery forecasts would ultimately depend on buyers and sellers.

He added: “If buyers manage to push the exchange rate higher in the coming days, resistance appears at 1.1225, but if the pair breaches this area, we could see a move toward 1.1375.

“On the other hand, if sellers regain decisive control of the market and trigger a bearish reversal, the first support to take into consideration lies around the psychological 1.1000 handle.

“If this region is broken on the downside, bears could launch an attack on 1.0920, followed by 1.0775.”



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