The value of the British currency declined against the US dollar and reached the level of 1.3780.
The dollar strengthened across the entire spectrum of the market on the back of strong retail sales data last month. The indicator grew by 2.5% in annual terms, although even a slight decrease was expected according to forecasts. The pair has remained in the middle of the 1.3600–1.4000 range since June 2021. Despite the high demand for the US currency, the pound continues to hold its positions against the dollar. The situation with the energy crisis in Europe may put pressure on the pound in the very near future. Yesterday, a major fertilizer manufacturer announced the closure of two plants in the UK. This can be considered the first sign that the record increase in gas and electricity prices may slow down the recovery of the region's economy. At the same time, the company did not give any forecasts about the timing of the resumption of production. The problem is connected with a serious shortage of energy resources in Europe and a record increase in gas and electricity prices. The continent does not have time to fill the storage facilities before the beginning of winter, as flows from leading suppliers from Russia and Norway are still limited. In addition, countries are competing for the supply of liquefied natural gas, while Asia is buying up cargo to meet its own demand. The crisis can lead to serious economic consequences. According to Goldman Sachs, due to a sharp increase in prices, there may be a risk of power outages in the winter. The power outage is likely to lead to an even greater increase in energy prices, increasing concerns about inflation and increasing the costs of enterprises for raw materials.
The forecast expects a further decline in the pound/dollar exchange rate to the price values of 1.3760, 1.3730 and 1.3700.