Economic data out of the UK released in the last couple of days has been pound-positive, yet the GBPUSD is still holding below the 1.30 handle. But for how long? Given that the positively-correlating EURUSD pair has already broken well above its own corresponding psychological hurdle at 1.10 after a sharp rally, the cable could be playing catch up.
The euro continues to defy gravity. The single currency is up sharply against all of its major rivals, including the pound which took a beating despite stronger UK inflation figures released this morning.
The dollar has been trending lower ever since the turn of the year. This has been because of the unwinding of the bullish positions that had been accumulated before and after the US election in part as investors began to question how much of the promised fiscal spending President Trump will actually deliver and how this may impact growth and inflation, and in turn interest rates.
After a 300-pip rally on Tuesday, the GBPUSD is unsurprisingly taking a breather today. Tuesday’s upsurge came on the back of news Theresa May called for a snap general election.
EURUSD has been selling off recently but it could be approaching a turning point as it nears the bottom of the longer-term ascending channel visible on the 4-hour time frame.
It has been a relatively quiet day in the markets due in part to the lack of any major economic news. The US economic calendar in particular will be rather light this week due to Thanksgiving on Thursday.
Forget the Bank of England meeting today, it is all about politics as far as the pound is concerned.
Gold and silver have started the new trading week, month and quarter on the back foot today. At the time of this writing, gold was trading at $1312 and silver was below $19.00 per troy ounce once again.
News that the UK manufacturing activity in September hit its highest level since June 2014 has provided a welcome relief for sterling.
The pound took a pounding in the lead up to and aftermath of the June 23 EU referendum. But in recent weeks, it has staged a remarkable recovery, even though the Bank of England has decided to cut interest rates to near zero and restarted QE.
