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GBP/USD fell 0.9% on Thursday, breaking below 1.3500 amid political turmoil in the UK Labour Party. The pair closed near session lows at 1.3395, extending a multi-week downtrend from March peaks. Despite stronger-than-expected UK GDP data, the pound remained under pressure as investors prioritized political risks over economic fundamentals. The bearish momentum accelerated during European hours, with the daily candle showing a stair-step decline.
The decline highlights the growing influence of political instability on currency markets. UK political uncertainty, particularly within the Labour Party, has overshadowed positive economic data, leading to increased risk-off sentiment. Traders are now assessing whether the pound can find support near 1.3300 or if further declines are likely. The move also impacts cross-currency pairs involving GBP, creating volatility in forex markets.
For MENA investors, the GBP weakness against the USD presents both risks and opportunities. The pound's decline could benefit Gulf-based importers of UK goods but may pressure exporters. Traders should monitor upcoming Labour Party developments and UK GDP revisions for potential market-moving catalysts. Technical indicators suggest a possible continuation of the downtrend if key support levels hold.
