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GBP/USD Approaches 5-Week Lows as Crimea Tensions Escalate

H.S. Borji
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GBP/USD Approaches 5-Week Lows as Crimea Tensions Escalate

The British pound was weaker Tuesday, falling to its lowest level in nearly five weeks amid signs Russia is planning to absorb the Black Sea Peninsula.

Speaking in front of Russian parliament, President Vladimir Putin officially recognized Crimea’s call to join the Russian Federation. The speech came just days after an overwhelming majority of Crimeans voted to join the Russian Federation. Describing Crimea as an “inseparable part of Russia,” Putin proceeded to criticize the West, and the United States in particular, for its double standards.

“Our Western partners, headed by the United States, prefer not to be guided by international law in their practical policies, but by the rule of the gun,” Putin said, according to a France 24 report. “They have come to believe in their exceptionalism and their sense of being the chosen ones.”

The GBPUSD pair hit 1.6552 in the early North American session, the pair’s lowest in almost five weeks. The pair would later consolidate at 1.6576, retreating more than 0.3 percent.

In the UK, a dearth of economic data kept the forex market fixated on an unprecedented shakeup at the Bank of England. The central bank, under the authority of Governor Mark Carney, appointed two deputy governors today. Nemat Shafik, former deputy managing director of the International Monetary Fund, was appointed deputy for markets and banking.

The BOE also announced the appointment of Ben Broadbent to deputy governor. Already on the Monetary Policy Committee, Broadbent will replace Charlie Bean as deputy governor after he retires this summer.

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