GBP: Pound gains as USD softens – Scotiabank

FXStreet Insights Team FXStreet

The Pound Sterling (GBP) is up a modest 0.2% vs. the US Dollar (USD) and a relative performer among the G10 currencies in an environment of broad – albeit mild – USD weakness, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

GBP/USD consolidates near 200-DMA

"The GBP’s gains are welcome following the pullback from its recent early January high above 1.35, with support offered by this week’s stronger than expected industrial production figures that appear to have lifted short-term rate expectations for the BoE."

"While the short-term rates market continues to lean toward further easing, the extent of cuts has been pared back with markets now pricing about 42bpts by the end of this year (vs. 47bpts last Friday)."

"The overall technical picture is neutral with an RSI that continues to hover around the 50 threshold. Recent congestion has centered around the 200 day MA (1.3406) and the near-term balance of risk appears to favor consolidation within a tight range bound between 1.3350 support and 1.3450 resistance."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD struggles for direction around 1.3550

GBP/USD finds it difficult to extend recent gains, meeting decent resistance around the 1.3550 area on Tuesday. Cable’s irresolute price action follows the equally directionless performance of the Greenback, while the disheartening UK jobs data also seem to linit the upside.

EUR/USD remains slightly bid, still below 1.1600

EUR/USD keeps the current bullish tone well in place and approaches the 1.1600 region on turnaround Tuesday. Indeed, the pair advances for the fourth day in a row amid the lack of direction in the US Dollar, steady uncertainty in the geopolitical landscape and diminishing bets for further Fed rate hikes.

Gold challenges $4,400 amid modest losses

Gold faces some fresh selling pressure and retreats modestly to the area below the $4,400 mark per troy ounce after two consecutive daily advances. The precious metal’s correction comes in tandem with the absence of direction in the US Dollar, declining US Treasury yields across the curve and continuous uncertainty in the Middle East crisis.

Crypto Today: Bitcoin, Ethereum, XRP falter amid escalating US-Iran tensions

Cryptocurrency prices are broadly correcting on Tuesday, with Bitcoin edging lower toward $64,000. Ethereum shows weakness amid ongoing narrow-range consolidation, while Ripple trades below $1.00, weighed down by falling technical indicators.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.