- Dollar comes back into play, DXY rises 1.25%.
- UK PM Truss sticks to his plan and the pound falls again.
- GBP/USD falls more than 200 points on Wednesday.
The pair GBP/USD It is trading at the lowest level in two days, around 1.1230, after falling more than 270 points from the intraday high. Earlier the pair reached a high of 1.1496, the highest level since September 15.
The combination of the dollar’s return to the market and the weakness of the British pound sent the cable soaring on Wednesday. It has erased more than half of the week’s gains and is approaching the 1.1200/05 support zone.
The pound was already trading with some weakness that began around the speech of British Prime Minister Liz Truss. She spoke at the Conservative Party conference defending her plan. She said cutting taxes was the “morally and economically” right thing to do. Truss mentioned that it is correct that the Bank of England sets interest rates independently. Her words did not provide support for the pound.
GBP/USD started lower from over 1.14000 and then accelerated amid a stronger US dollar. DXY rises 1.25% as US yields move strongly higher. The 10-year interest in the US stands at 3.77%, far from 3.56% on Tuesday.
US economic data came in better than expected on Wednesday, helping the dollar rally overall. Private sector employment rose by 208,000 people in September according to ADP, above market expectations of 200,000. The ISM Services PMI came in at 56.7, above the 56 expected; the employment index unexpectedly rose to 53 from 50.2. The official US employment report will be released on Friday.
Technical levels
Source: Fx Street
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