Image © Adobe Images
It's a sea of red for the British Pound on January 02, the first trading day of 2025.
There is no news behind the move, but we do have one incredible statistic: "Remarkably, this extends sterling's losing run on the first day of the trading year to seven years," says Shreyas Gopal, Strategist at Deutsche Bank.
The Pound-Dollar exchange rate (GBP/USD) is down by more than a per cent on the day at 1.2372, but it's the Pound-Australian Dollar conversion which is leading the charge lower in GBP FX, coming in 1.50% lower at 1.9940. Elsewhere, Pound-Euro is down by 0.20% at 1.2067.
Gopal points out that Pound Sterling has only managed three positive returns over twenty years of first-day trading.
The analyst notes that there is no clear driver behind the move, but a strong start to 2025 for the Dollar is notable. "We'd put the additional sterling underperformance down to a beta of the technical breaks of last year's low in EUR/USD and of multi-month lows in Cable," he notes.
Yet, currencies most sensitive to the Dollar - like the Australian Dollar - appear to be doing exceptionally well, which suggests this isn't solely a USD story.
Given there is no clear narrative behind the declines, will the Pound snap back? Gopal warns against jumping into the dip.
"On a forward-looking basis, we find no strong patten of first-day Cable losses either reversing or extending over the following week," he says.