Breaking: GBP/USD sinks below the 1.1000 figure, registering fresh 37-year lows

GBP/USD tanks more than 2%, weighed by worse-than-expected UK economic data.
The US Federal Reserve’s aggressive monetary policy is a headwind for the GBP/USD.
US business activity contracted but gave signs of improvement.
UK’s consumer confidence and business activity disappoint, increasing fears of a deep recession in the UK.

FXStreet Team FXStreet

The GBP/USD is collapsing from 1.1200, eyeing a break below the 1.1000 figure, which was last seen in March 1985, courtesy of dismal market sentiment, spurred by worldwide central bank tightening to quell price pressures. The GBP/USD is trading at 1.0965, below its opening price by more than 2%, after hitting a daily high of 1.1273.

Given the backdrop that the Federal Reserve hiked rates by 75 bps on Wednesday and signaled that further increases are coming, investors growing fears heightened that it would hurt the company’s earnings and might tap the US economy into a recession. In the meantime, US business activity in September shrank, as reported by S&P Global, though it flashed some signs of recovering.

The S&P Manufacturing PMI expanded more than the 51 estimates, while the Services index jumped to 49.2 but fell short of expansionary territory. Consequently, the Composite Index persisted under 49, at contractionary territory, but above calculations.

Aside from US data, in the UK, the GfK consumer confidence showed that households feel “exasperated” with the UK’s double-digit inflationary readings. The GfK index dived to a record low of -44, which was last seen in 1974.

Later, S&P Global revealed the UK PMIs for September, with the Composite Index edging down from 49.6 in August to 48.4, reigniting recessionary fears. “UK economic woes deepened in September as falling business activity indicates that the economy is likely in recession,” said Chris Williamson, a chief business economist at S&P Global.

Further, the Services Index fell to 49.2 from 50.9 in August, while the Manufacturing PMI bounced from 47.3 to 48.5

All that said, the GBP/USD so far has extended its losses during the day, hitting the 1.0985 figure for the first time since 1985, opening the door for a retest of March’s lows at 1.0545.

GBP/USD Hourly Chart

GBP/USD Key Technical Levels

GBP/USD

Overview
Today last price	1.0965
Today Daily Change	-0.0272
Today Daily Change %	-2.42
Today daily open	1.1259

Trends
Daily SMA20	1.1519
Daily SMA50	1.1828
Daily SMA100	1.206
Daily SMA200	1.2666

Levels
Previous Daily High	1.1364
Previous Daily Low	1.1212
Previous Weekly High	1.1738
Previous Weekly Low	1.1351
Previous Monthly High	1.2294
Previous Monthly Low	1.1599
Daily Fibonacci 38.2%	1.127
Daily Fibonacci 61.8%	1.1306
Daily Pivot Point S1	1.1193
Daily Pivot Point S2	1.1126
Daily Pivot Point S3	1.104
Daily Pivot Point R1	1.1345
Daily Pivot Point R2	1.1431
Daily Pivot Point R3	1.1497

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD picks up extra pace north of 1.1400

EUR/USD extends its recovery past 1.1400 the figure as the NA session draws to a close on Monday. Indeed, the pair advances for the third straight day amid the persistent offered bias in the US Dollar. Meanwhile, market participants keep gearing up for the ECB Forum in Sintra and the release of critical US labour market data.

Gold struggles to attract investors

Gold remains under marked selling pressure, holding on just above the key $4,000 mark per troy ounce at the beginning of the week. The precious metal reverses two daily advances in a row as renewed effervescence in the Middle East revive inflation concerns and bolster Fed rate hike expectations.

Strategy unveils plan allowing Bitcoin sales to fund stock buybacks, dividends and reserves

Strategy (MSTR) has unveiled a Digital Credit Framework to strengthen the company’s financial standing. Under the new framework, the world’s largest corporate holder of Bitcoin (BTC) will pivot from its previous accumulation strategy, opting to sell BTC in order to boost liquidity, fund dividend payments, execute stock buybacks, and strengthen cash reserves.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.