- GBP/USD cheers broad US Dollar weakness to refresh multi-day top.
- Brexit pessimism, mixed UK PMIs probe upside momentum during Thanksgiving holiday in the United States.
- Fed Minutes propelled pivot talks and joined downbeat US statistics to weigh on the USD.
GBP/USD takes the bids at the highest levels since August 17 as buyers attack 1.2100 threshold heading into Thursday’s London open. In doing so, the Cable pair cheers the broad-based US Dollar while paying a little heed to the UK’s Brexit-linked issues and recently mixed data.
The United Kingdom’s (UK) Prime Minister (PM) turned down expectations of having a soft corner for the European Union (EU), especially due to Chancellor Jeremy Hunt’s secret wish. Even so, the Financial Times (FT) said, “Rishi Sunak is under pressure from a broad alliance of British business, legal, worker and environmental groups to drop controversial plans to automatically strip swaths of EU-derived law from the British statute book by the end of next year.” It should be noted that the British Supreme Court rejected the Scottish plea to have a fresh referendum for an independent nation.
On a different page, the UK’s first readings of S&P Global/CIPS Manufacturing PMI for November reprinted 46.2 figure versus 45.8 market forecasts while the Services counterpart also followed the suit while again flashing 48.8 numbers compared to 48.0 expected figure. Even so, the S&P Global/CIPS Composite PMI for the said month improved to 48.3 from 48.2 prior while beating 47.5 market expectations.
Above all, easing fears of the US Federal Reserve’s (Fed) aggressive rate hikes, due to the latest Federal Open Market Committee (FOMC) Meeting Minutes, seemed to have lured the GBP/USD bulls. As per the recent minute statement, the majority of the policymakers discussed the need of slowing down the interest rate hikes. Additionally weighing on the Greenback were chatters over the “sufficiently restrictive” level of the Federal Reserve’s (Fed) interest rates, as indicated in the Fed Minutes.
Additionally fueling the GBP/USD price are the most downbeat US statistics. The preliminary readings of the US S&P Global Manufacturing PMI for November eased to 47.6 from 50.0 expected and 50.4 prior whereas the Services PMI also followed the suit while declining to 46.1 compared to 47.9 market forecasts and 47.8 previous readings. Overall, the S&P Global Composite PMI for November dropped to 46.3 versus 47.7 expected and 48.2 prior readouts. On the same line, United States Weekly Jobless Claims rose the most since June, to 240K versus 225K expected and 223K prior, which in turn favored the sentiment and drowned the US Dollar.
It’s worth noting that the cautious optimism surrounding China’s ability to overcome the Covid woes and readiness for further stimulus appeared to favor the risk-on mood as of late. While portraying the mood, the S&P 500 Futures prints mild gains near the monthly high but the off in the United States due to the Thanksgiving celebration restricts the bond moves. Even so, the scheduled speeches of multiple officers from the Bank of England (BOE) and headlines surrounding Brexit may entertain the GBP/USD pair traders.
Technical analysis
200-day EMA joins the overbought RSI (14) to challenge GBP/USD bulls around 1.2105. The pullback moves, however, remain less problematic unless declining below July’s low near 1.1760.
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
Australian Dollar appreciates despite stronger US Dollar, PMI awaited
The Australian Dollar (AUD) continues to strengthen against the US Dollar (USD) following the release of mixed Judo Bank Purchasing Managers' Index (PMI) data from Australia on Friday. The AUD also benefits from a hawkish outlook by the Reserve Bank of Australia (RBA) regarding future interest rate decisions.
Japanese Yen remains on the front foot against USD, bulls seem non-committed
The Japanese Yen (JPY) attracts some buyers for the second straight day on Friday amid reviving bets for more interest rate hikes by the Bank of Japan (BoJ), though it lacks any follow-through.
Gold advances to near two-week high, eyes $2,700 on geopolitical tensions
Gold price (XAU/USD) prolongs its uptrend for the fifth consecutive day on Friday and climbs to a nearly two-week top, around the $2,690-2,691 area during the Asian session. Intensifying Russia-Ukraine tensions force investors to take refuge in traditional safe-haven assets and turn out to be a key factor underpinning the precious metal.
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally
Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.