• The US Dollar is firmly up on the back of inflation concerns.
  • US Initial Jobless Claims drop for the second-consecutive week, at 290K.
  • GBP/USD:  Will finish the year around 1.3800 – Scotiabank.

The British pound extends its slide below 1.3800 during the New York session, losses 0.26%, trading at 1.3788 at the time of writing. As portrayed by US stocks indices rising between 0.19% and 0.58%, the market mood has slightly improved, except for the Dow Jones Industrial, dropping 0.12%. 

DXY recovers from early week losses

The US Dollar Index, which measures the greenback’s performance against a basket of six peers, advances firmly 0.17%, currently at 93.722, uplifted by higher US T-bond yields, which rallied on the expectations that high inflation in the country, might force the Federal Reserve to react, hiking interest rates, sooner than later.

Meanwhile, the US 10-year Treasury yield climbs four basis points, sitting at 1.677% at press time.

On the macroeconomic front, in the UK, the Public Sector Net Borrowing for September, at £21.014B, was lower than the £27.152B expected

On the US economic docket, US data was mixed. Weekly jobless claims have dropped to their lowest levels in 19 months and existing home sales increased 7.0% to 6.29 million in September, the highest reading since January. Contrarily, the Philadelphia Fed Manufacturing survey slid to 23.8 from 30.7 in the previous month.

GBP/USD:  Will finish the year around 1.3800 – Scotiabank

The FX Analysis team at Scotiabank expects the pair to end the year around 1.3800:

“The GBP remains well supported by hawkish BoE expectations that should prevent sustained declines under 1.36, but we think there is likely more downside than upside risk to market expectations for BoE tightening as already over 100bps in hikes are priced in between now and end-2022.”

“We think the GBP/USD will struggle to make a push toward a test of 1.40 despite the high probability of at least one hike shortly and think it more likely that the pound closes the year near the 1.38 level.”

GBP/USD key additional levels to watch

Today last price 1.3788
Today Daily Change -0.0036
Today Daily Change % -0.26
Today daily open 1.3824
Daily SMA20 1.3638
Daily SMA50 1.3715
Daily SMA100 1.3808
Daily SMA200 1.3849
Previous Daily High 1.3834
Previous Daily Low 1.3742
Previous Weekly High 1.3773
Previous Weekly Low 1.3568
Previous Monthly High 1.3913
Previous Monthly Low 1.3412
Daily Fibonacci 38.2% 1.3799
Daily Fibonacci 61.8% 1.3777
Daily Pivot Point S1 1.3766
Daily Pivot Point S2 1.3708
Daily Pivot Point S3 1.3674
Daily Pivot Point R1 1.3858
Daily Pivot Point R2 1.3892
Daily Pivot Point R3 1.395



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