GBP/USD declines towards 1.1940 amid cautious market mood, Fed commentary ahead
|- GBP/USD is looking to test weekly lows at 1.1940 as the risk-off impulse has remained solid.
- The US Treasury yields have accelerated as Fed policymakers see no halt in rate hike culture in the near term.
- The speech from Andrew Bailey failed to provide cushion to Pound bulls.
The GBP/USD pair is seeking a cushion around the immediate hurdle of 1.1950 in the early Tokyo session. The Cable displayed volatile moves on Tuesday after failing to sustain above the psychological resistance of 1.2000 as the FX domain turned currency-specific. The further road is still favoring a bumpy ride for the Pound Sterling as a speech from Federal Reserve (Fed) chair Jerome Powell could infuse adrenaline rush into the US Dollar index (DXY).
The Cable is expected to test the weekly low at 1.1940 amid a cautious market mood. Meanwhile, the US Dollar Index (DXY) is aiming to shift its business above 106.80 as the risk-aversion theme has improved safe-haven’s appeal. The 10-year US Treasury yields have accelerated to 3.75% as Fed policymakers see no halt in rate hike culture in the near term.
The speech from Fed chair Jerome Powell is expected to weaken obscurity over the extent of an interest rate hike for December monetary policy. Apart from that, minutes of the Fed’s Beige Book will remain under the radar, which will provide regional status of employment, consumer spending, and the extent of economic activities.
This week, the US Nonfarm Payrolls (NFP) is the show-stopper event. But before that, investors will focus on US Automatic Data Processing (ADP) Employment data doe meaningful cues. As per the consensus, the United States economy has added fresh 200k jobs in the labor market lower than the prior release of 239k.
On the UK front, the speech from Bank of England (BOE) Governor Andrew Bailey on Tuesday failed to provide a cushion to Pound bulls. Testifying at the Lord's Economic Affairs Committee, BOEE Governor cited that "There has been no discussion with the government on the pace and timing of BoE asset sales." He believes that the “UK labor market has turned out to be much more constrained than we thought, different to other countries."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.