The GBP/USD pair fell during Thursday’s North American session as the US Dollar reached a 9-week high, with the USDollar Index hitting 99.51 due to strong buying. GBP/USD dropped to 1.3314, down 0.67%, marking its lowest point since August 6. The Pound Sterling (GBP) has been losing value against the US Dollar (USD) for three straight trading days. However, during Thursday’s Asian session, GBP/USD showed signs of recovery, exceeding 1.3400 as the US Dollar weakened slightly after hitting a two-week low.

Other Market Movements

Other market changes include a drop in EUR/USD to levels not seen since early August, primarily due to a strong US Dollar coupled with concerns about a shutdown. Gold prices fell below $4,000 per ounce as traders took profits amidst ongoing geopolitical tensions and expectations of Federal Reserve rate cuts. In the cryptocurrency market, Ethereum experienced an 8% decline over the past three days, with medium-scale holders reducing their holdings by 1.22 million ETH since Monday. Meanwhile, Zcash showed signs of growth, potentially breaking above $200 soon. The strength of the US Dollar should be the main focus in the coming weeks. With the DXY index hitting multi-week highs and surpassing 99.50, this momentum seems set to continue as speculative positions build. Last week’s data revealed that non-commercial traders increased their net long US dollar positions by over $2 billion, marking the largest weekly increase since July 2025. For those trading the Pound, the break below the 1.3300 level against the Dollar is a strong technical signal for potential further weakness. Consider buying put options on GBP/USD, targeting moves towards the summer 2025 lows. The UK’s stubborn services inflation, which stood at 4.8% in the latest report, leaves the Bank of England with little room to support the currency.

The Euro’s Sharp Decline

The euro’s sharp decline below 1.1600 stems from both the strength of the dollar and specific political risks emerging in France. This situation mirrors the market jitters seen during the French election cycle in 2022, which also sparked a move towards the safety of the dollar. We suggest considering put options on EUR/USD as a way to prepare for a test of the 1.1500 support level. Broader market fear, shown by the Dow Jones hitting a one-week low, suggests a risk-off environment that often favors the dollar. The CBOE Volatility Index (VIX) has risen over 20% in the past ten days, trading above 19, which indicates that traders are actively seeking protection against further stock market declines. This supports strategies that are short risk assets. Gold’s drop from its all-time highs above $4,000 illustrates how even traditional safe-haven assets are struggling against the dollar’s dominance. In past periods of significant risk, such as the government shutdown scare of late 2023, the dollar has often performed better than gold in the short term as global capital prioritizes liquidity. We advise caution in buying this dip in gold until there’s evidence that the dollar’s momentum is fading. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now