Why did the Pound plunge at the opening of the early European session today?
This is due to the market's reaction to the statement made by Bank of England (BOE) Governor Andrew Bailey in an interview event.
The war conflict situation in the Middle East which is currently escalating is also a focus for the central bank which is seen to disrupt the stability of global crude oil prices.
According to Bailey, he is closely monitoring the development of the issue and said that their actions are limited in an effort to curb the rise in crude oil prices if the situation worsens.
The price of UK Brent oil, which previously fell to $70.00 per barrel, has risen to $76.00 yesterday due to concerns about the Iran-Israeli war.
However, the price fell slightly in the New York session yesterday to around $73.50 before gradually recovering today.
In an interview with UK Guardian media, Governor Bailey revealed about the prospect of the central bank to be more aggressive in cutting interest rates following the development of inflation in the country.
The 'dovish' indication that was delivered had a direct impact on the depreciation of the Pound at the beginning of today's European session.
On the chart of the GBP/USD currency pair, the price dropped below 1.32000 while on the GBP/JPY chart, the price dropped below the 193.500 level.
