GBP/USD inches lower to near 1.3100 as UK Gilts tick down
GBP/USD loses ground after three days of gains, trading around 1.3100 during the Asian hours on Tuesday. The Pound Sterling (GBP) came under pressure as UK 10-year Gilt yields edged lower to 4.54%, with investors awaiting the November 26 budget. Finance Minister Rachel Reeves is expected to find tens of billions of pounds to meet fiscal rules, while the OBR is set to downgrade growth and productivity forecasts.
GBP sentiment is further weighed by softer inflation, which eased to 3.6% in October and strengthened expectations of a Bank of England (BoE) rate cut. Markets now assign an 80% probability of a 25-bp cut in December, pushing gilt yields lower ahead of the budget. Read more…
GBP/USD steady near 1.3100 amid US holiday-shortened trading week
GBP/USD lost momentum on Monday, holding near 1.3100 as investors grapple with an extremely short week. US markets will be dark on Thursday for the American Thanksgiving holiday, and US markets will also be shuttered early on Friday, effectively constraining Cable traders to just a three-day trading week where markets on both sides of the Atlantic will be open at the same time.
Broad market hopes for the Federal Reserve (Fed) to deliver a third straight interest rate cut in December are holding on the high side on Monday. According to the CME’s FedWatch Tool, rate traders are pricing in nearly 80% odds of a 25-basis-point rate trim on December 10. There’s still plenty of wiggle room, however, with over 98% odds that the Fed will deliver another rate cut by January 28 if a December cut fails to materialize. Read more…
GBP/USD flat with tension rising before UK budget and US data surge
The GBP/USD pair remains subdued on Monday during the North American session, trading unchanged at around 1.3088 as traders await the release of the UK’s budget amid a shortened week due to the US Thanksgiving holiday.
The US Dollar (USD) remains solid as depicted by the US Dollar Index (DXY), which measures the buck’s performance against six currencies. The DXY is flat at 100.21, capped by fears of a possible Japanese intervention in the FX markets. Read more…
