- GBP/USD picks up bids to pare the biggest daily loss in a week.
- UK PM Sunak rules out Swiss-style trade ties with Eurozone.
- US Dollar struggles to cheer escalating Covid woes amid lack of major data/events.
GBP/USD refreshes intraday high around mid-1.1800s, reversing the previous day’s losses, as the US Dollar tracks softer Treasury yields during early Tuesday. In doing so, the Cable pair fails to justify recently escalating fears of a hard Brexit.
“Britain will not pursue any trading relationship with the European Union that relies on the country aligning with the bloc's laws, Prime Minister Rishi Sunak said on Monday after a newspaper reported his government was pursuing closer ties,” mentioned Reuters.
It’s worth noting that the US Dollar Index (DXY) pauses a two-day downtrend near 107.70 as the latest comments from the Federal Reserve (Fed) officials failed to impress policy hawks.
Federal Reserve Bank of Cleveland President Loretta Mester said in a CNBC interview, “I think we can slow down from 75 at the December meeting.” Previously, Atlanta Federal Reserve President Raphael Bostic also turned down the 75 bps move and challenged the DXY bulls.
However, seven-month high daily coronavirus cases from China renewed supply-crunch fears and underpin the US Dollar’s haven demand. Also, the recently firmer prints of the US Retail Sales and Producer Price Index (PPI) for October propelled the hawkish bets on the Fed’s next move and favored greenback buyers previously.
Amid these plays, Wall Street closed in the red and the US Treasury yields recovered before marking mild losses. That said, S&P 500 Futures rise 0.15% intraday near 3,965 whereas the US 10-year Treasury yields dropped one basis point (bp) to 3.81% at the latest.
Moving ahead, a lack of major data/events could allow GBP/USD to defend the latest rebound. However, Wednesday’s preliminary readings of the monthly activity data and the Federal Open Market Committee (FOMC) Meeting Minutes will be crucial for clear directions.
Technical analysis
A one-week-old descending trend line, around 1.1890 by the press time, restricts immediate GBP/USD recovery ahead of the key resistance line from mid-June, close to the 1.2000 threshold at the latest. Alternatively, September’s peak surrounding 1.1590 challenges the bears.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD favours extra retracements in the short term
AUD/USD kept the negative stance well in place and briefly broke below the key 0.6400 support to clinch a new low for the year on the back of the strong dollar and mixed results from the Chinese docket.
EUR/USD now shifts its attention to 1.0500
The ongoing upward momentum of the Greenback prompted EUR/USD to lose more ground, hitting new lows for 2024 around 1.0600, driven by the significant divergence in monetary policy between the Fed and the ECB.
Gold ascends but remains shy of testing $2,400 amid hawkish Fed remarks
Gold prices edged higher late in North American session, gaining 0.22% following a hawkish tilt by Fed Chair Jerome Powell. Economic data from the United States was mixed, though Monday’s Retail Sales report and Powell’s remarks kept US Treasury yields higher, capping the yellow metal’s advance.
Bitcoin price outlook amid increased demand and speculation pre-halving
Bitcoin price is edging lower as markets count only days to the halving. Nevertheless, the dump has not shaken the faith of large holders as they continue to cling to their holding even after a month of steady dumps.
UK CPI inflation data ahead: Sterling hovering north of key support
Following today's mixed bag of employment and wages data, today’s attention is directed to the March UK CPI inflation release. Both headline and core measures have surprised to the downside in the previous two releases and are expected to demonstrate further evidence of disinflation.