- Libra among the worst performers of the G10 during the US session.
- DXY trims losses as optimism begins to fade.
- GBP/USD unable to sustain recovery, 1.3050 exposed.
The GBP/USD it trimmed all gains and fell back below 1.3100 after hitting a daily high at 1.3159. The dollar strengthened as Wall Street trimmed gains, while the pound weakened.
Data offset by market sentiment
The rally in stocks at the start of the US sessions pushed the dollar to new lows across the board. During the last few hours, optimism faded and the USD regained momentum. Still, falling US Treasury yields could cap the dollar’s upside. The 10-year yield is below 2.40%.
US data beat expectations on Tuesday. The Job Opening and Labor Rotation Survey (JOLTS) showed jobs at 11.26 million (consensus 11.0 million); The S&P/Case-Shiller home price index rose 19.1% in January from a year earlier, above the 18.4% market consensus. On the downside, the Conference Board Consumer Confidence Index fell to 107.2, the lowest level in 13 months. The ADP employment report is due Wednesday and the nonfarm payroll report is due Friday.
ING analysts note that “strong and vibrant housing and labor markets reinforce the message that the Fed has a lot of work to do to regain control of inflationary pressures. Consumer confidence is weakening, presumably due to higher prices, but for now at least, households are happy to continue spending. The case for a series of 50bp Fed rate hikes is growing.” The Fed’s Harker said on Tuesday that the central bank “collectively underestimated” the impact of fiscal spending on inflation.
The pound remains weak after Bank of England Governor Bailey sounded a cautious tone on Monday, warning of economic uncertainty. Additionally, the currency is taking a hit from the rally in EUR/GBP which is trading above 0.8465, at the highest level since early March.
Technical levels
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
