- GBP / USD stalls at 1.3838 for the third day in a row.
- Investors are betting on a rate hike from the Bank of England for the November meeting.
- Initial jobless claims in the US fall for the second week in a row, to 290,000.
The GBP It falls during the American session, stagnates around 1.3811, loses 0.09%, trading at 1.3817 at the time of writing.
Market sentiment is mixed, represented by the decline in European stock indices. At the same time, all US stock indices posted moderate gains, except for the Dow Jones Industrial, which is losing 0.24%, due to worse-than-expected IBM earnings. Furthermore, the oil rally stalled as Evergrande concerns surround financial markets once again as its shares plunged 11.6% after the sale of a $ 2.6 billion stake failed, and persists. the risk of a possible spill. Safe-haven currencies like the US dollar and Japanese yen were up against most G8 currencies.
The US dollar index that tracks the dollar’s performance against a basket of six pairs has risen 0.02% to 93.62, while the 10-year US Treasury yield is back four basis points to 1,673%, almost ten basis points below the 2021 high.
GBP / USD found a wall at 1.3838 for the third time this week
The British pound stalled once again at the 1.3838 resistance for the third day in a row. Investors’ bets on a Bank of England rate hike had risen since October 9. Two lawmakers expressed concern about high prices, indicating that the Bank of England will step up and act to curb inflationary pressures.
However, despite what the UK central bank has said about inflation, there are some variables that the Bank of England needs to take into account. COVID-19 cases are on the rise, and with the end of the licensing program, some banking analysts and strategists are starting to become more sterling neutral, according to Bloomberg.
Furthermore, discussions on the Northern Ireland protocol between the UK and the Eurozone threaten to start a trade war, severely damaging the UK economy.
On the macroeconomic front, in the UK, September’s public sector net debt of £ 21.014 billion was less than the expected £ 27.152 billion.
On the US economic agenda, Initial Unemployment Claims for the week ending October 16 fell to 290,000, less than the 300,000 predicted by analysts, showing that the job market is beginning to accelerate. the pace in a moderate way. Additionally, the 4-week moving average decreased by 122,000 to 2,481K in the week ending October 9.
That said, the main driver for GBP / USD would be the Bank of England’s decision, but also the announcement of the Fed’s gradual reduction of bonds and market sentiment could hold investors back from opening new positions in the pair.
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