A combination of factors prompts aggressive selling around GBP/USD on Friday.
The UK political development weighs on sterling amid resurgent USD demand.The mixed US Retail Sales report does little to provide any meaningful impetus.
The GBP/USD pair come under aggressive selling pressure on Friday and snaps a two-day winning streak to a one-week high touched the previous day. The intraday downfall is sponsored by a combination of factors, though spot prices show some resilience below the 1.1200 round-figure mark.
The British pound is pressured by the latest UK political developments, wherein reports confirmed that finance minister Kwasi Kwarteng has been sacked, making him the shortest-serving chancellor since 1970. This comes amid the emergence of aggressive US dollar buying, which, in turn, is seen exerting downward pressure on the GBP/USD pair.
The stronger US consumer inflation figures released on Thursday reaffirmed market expectations that the Fed will continue to tighten its monetary policy at a faster pace. In fact, the fed fund futures indicate a greater chance of another supersized 75 bps rate hike at the next FOMC meeting in November, which is seen underpinning the greenback.
The USD sticks to its strong intraday gains and seems unaffected by mixed US monthly Retail Sales data. The US Census Bureau reported that the headline sales were flat MoM in September, missing estimates, while sales excluding autos unexpectedly climbed by 0.1%. Furthermore, the previous month’s readings were also revised slightly higher.
That said, retreating US Treasury bond yields, along with signs of stability in the equity markets, hold back the USD bulls from placing aggressive bets. This, in turn, offers some support to the GBP/USD pair, at least for the time being. Traders now look to the Prelim Michigan US Consumer Sentiment and Inflation Expectations Index for a fresh impetus.
GBP/USD looks to stabilize above 1.1200 in volatile day
GBP/USD managed to recover above 1.1200 during the American trading hours as investors digested the latest political headlines from the UK. Truss confirmed the U-turn on the corporate tax increase and announced Jeremy Hunt is appointed as the new finance minister.
EUR/USD eases ahead of the weekly close as risk-off leads
EUR/USD peaked at 0.9771 following the mixed macroeconomic data releases from the US. Retail Sales remained virtually unchanged in September but the 5-year Consumer Inflation Expectation of the UoM’s survey climbed to 2.9% from 2.7%. Dollar advances as stocks slide, reflecting a dismal mood.
Gold stays deep in red below $1,650 as US yields push higher
Gold is having a difficult time staging a rebound and trading deep in negative territory below $1,650. The benchmark 10-year US Treasury bond yield is up more than 1% on the day at 4% following the consumer sentiment and retail sales data from the US, weighing on XAU/USD.
Bitcoin Weekly Forecast: Is this the start of BTC’s journey to $28,000?
Bitcoin price witnesses a massive surge in volatility after the release of the Consumer Price Index (CPI) on Thursday. An initial drop in price is later taken over by buyers, resulting in a sharp move to the upside.