GBP/USD Rate "Targets 1.3120" as Nasdaq Crash Driving FX Markets

March 11, 2025 - Written by Frank Davies

STORY LINK GBP/USD Rate "Targets 1.3120" as Nasdaq Crash Driving FX Markets

US equities posted sharp losses on Monday with a further sell-off in tech stocks. The Nasdaq index declined 4%, the sharpest decline for over two years.

The slide in US equities undermined confidence in the US outlook with the dollar index at fresh 4-month lows.

The Pound to Dollar (GBP/USD) exchange rate again found support below 1.2900 and advanced to 1.2935 in early Europe on Tuesday, close to 4-month highs.

According to Scotiabank; “A clear push through the low 1.29s targets 1.3120.”

MUFG commented; “Heightened US policy uncertainty created by President Trump is raising doubts over the US dollar’s safe haven role alongside the unwinding of popular US tech trades.”

There were, however, also sharp losses in European markets with the FTSE 100 index, for example, sliding to 5-week lows.

Although US confidence deteriorated, the slide in risk appetite also damaged the Pound and further global erosion could lead to defensive dollar demand.

Bank of Singapore strategist Sim Moh Siong commented; "The market is unsure whether fading U.S. exceptionalism will continue to hurt the dollar or whether the dollar benefits from its safe-haven status."

According to Pepperstone head of research Chris Weston; “Historically, the dollar outperforms when we get a solid rise in volatility, but when the U.S. economy and U.S. equity market are the central point of concern, this is now limiting the attractiveness of the dollar.”

There will be a significant US release on Tuesday with the latest data on job openings.

Consensus forecasts are for a small recovery to 7.65mn from 7.60mn the previous month.

A weaker than expected figure would trigger fresh dollar selling and a potential GBP/USD attack on 1.30 while a stronger rebound would provide temporary US relief.

According to ING; “Our view is that the dollar is embedding quite a lot of negatives at the moment and the balance of risks for the coming weeks has shifted to the upside. Nevertheless, in this jittery market environment, we are not ready to pick the bottom in the dollar before key data events have passed.”

The bank discussed how much pain the Trump Administration can take; “further loss of confidence may need to be tempered by the US administration itself.”

UK developments have remained firmly in the background given the global geo-political focus.

Domestically, the British Retail Consortium (BRC) data recorded a slowdown in like-for-like retail sales growth to 0.9% in the year to February from 2.5% previously.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, commented; “Retail sales saw more modest growth in February. While sales growth across non-food categories was generally muted, it was propped up by online purchases, particularly in computing and electronics.”

Barclays recorded a slowdown in annual consumer spending growth to 1.0% from 1.9% previously, but consumer confidence in household finances strengthened to the highest level since 2015.

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TAGS: Pound Dollar Forecasts