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GBP - fiscal fears

3 September 2025 14:29 RaboResearch

The UK is clearly not the only country facing a difficult fiscal prognosis but, since it also runs a sizeable current account deficit, there is potential for the exchange rate to be particularly sensitive to bad fundamental news. This week the pound has again demonstrated its reaction function to a jittery gilts market. Yesterday, cable plunged around 1.5% into its lows as the USD picked up a safe haven bid.

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Marketing communication / Non-Independent Research. This publication is issued by Coöperatieve Rabobank U.A., registered in Amsterdam, and/or any one or more of its affiliates and related bodies corporate (jointly and individually: “Rabobank”). Coöperatieve Rabobank U.A. is authorised and regulated by De Nederlandsche Bank and the Netherlands Authority for the Financial Markets. Read more