The British pound resumed its plunged for a fourth straight session on Monday, trading near its lowest level in nine weeks, as investors cut their net long bets amid drop in expectations of a May interest rate hike.
The pound dropped to a low of $1.3716, the lowest level since March 1, compared to the session’s open at $1.3769.
Last week, the sterling reported a hefty weekly loss of 1.53 percent, while it has tumbled 4.6 percent since hitting a peak of $1.4376 on April 17. The weekly drop was the strongest in the last eight months.
Quarterly economic growth in the U.K. reported the lowest figure in five years in the first quarter, as the GDP signaled a meagre 0.1 percent expansion from a 0.4 percent growth in the last quarter of 2017.
The dismal growth figures raised expectations the Bank of England would not hike its interest rates next month.
BOE Governor Mark Carney stressed that an interest rate increase in May was not a done deal, referring that the hike may occur in August or November.
The pressure on the pound mounted over the weekend after Home Secretary Amber Rudd resigned, raising concerns about internal conflict ahead of serious Brexit negotiations coming ahead.
Traders have lowered their May rate hike bets to 20 percent, tremendously down from 90 percent at the beginning of April.
It is worthwhile to mention that the pound has been the best performing G-10 currency over the past six months.
Later in the week, eyes will focus on U.K. manufacturing, construction
and services PMI data for April to get clues about the pace of growth in the
first month of the second quarter.