The pound is on course for its steepest losses in nearly a year due to fears of a U.S. recession. – Share Talk

The pound is on track for its longest losing streak in nearly a year as concerns about a potential U.S. recession re-emerge in financial markets.

Sterling has fallen nearly 1% so far this week, heading for a fourth consecutive weekly decline, its worst run since September.

Last week’s decision by the Bank of England to cut interest rates for the first time in four years weakened the pound. Since then, fears of a hard landing for the U.S. economy, among other factors, have triggered a sell-off in global stocks and currencies, dragging sterling down along with other markets worldwide.

Today, the FTSE 100 dropped by as much as 1.2%, with major European markets also down about 1%, as Wall Street increases its predictions of a U.S. recession over the next year.

JP Morgan has raised its probability of a recession in the U.S. this year from 25% to 35%, with a 45% chance of it occurring by the second half of 2025.

However, recent data showed that the number of Americans on unemployment benefits declined at its fastest pace in nearly a year in the week to August 3, easing some concerns about a U.S. downturn.

The S&P 500 on Wall Street has gained 1%, while the FTSE 100 has reduced its losses to 0.5%.