Sterling moves in negative zone on grim economic outlook

Sterling fell in European trade for the fourth straight session against dollar, amid a grim outlook for the UK economy in the second quarter of the year.

The dollar is maintaining its gains near 11-week highs amid strong bets on high US interest rates for an extended duration. 

GBP/USD fell 0.1% to 1.2409, with a session-high at 1.2438, after closing down 0.1% yesterday, the third loss in a row. 

UK Economy

Some global banks are expecting the UK economy to slow down sharply in the second half of the year, led by the housing sector, which might force Bank of England to cut interest rates early. 

JPMorgan's analysts are pointing to the deteriorating markets of the UK housing sectors with the background of high and stubborn inflation.

Mortgage approvals continue to decline, an indication that current financial conditions are weighing on consumers. 

JPMorgan forex strategists are now selling the UK pound, noting it's only a matter of time before an extended duration of decline due to weaker growth. 

Dollar

The dollar index rose 0.1% on Wednesday for a second session on track to hit an eleven-week high at 104.69 against a basket of major rivals. 

Markets are betting the Federal Reserve will maintain interest rates higher for a longer period of time, in turn underpinning the greenback.