Sterling is one of the weaker-performing majors on the session. Economists at Scotiabank expect the low 1.14 zone to cushion the GBPUSD downside.
UK political backdrop remains somewhat unsettled.“The UK political backdrop remains somewhat unsettled, with a minister from new PM Sunak’s cabinet forced to resign today. More turnover of government ministers would not surprise but the key issue for the GBP as far as Westminster goes in next week’s update on government finances.”
“Intraday support is developing at 1.1430 which may provide some lift for the GBP to retest the mid-1.15s but failure to hold the low 1.14 zone will point to renewed losses towards 1.12/1.13.”
EURUSD drops below 1.0050 as US Dollar gathers strength
EURUSD remains on the back foot and trades below 1.0050 in the early American session. The US Dollar benefits from safe-haven flows mid-week as investors await the final outcome of the US Midterm Elections. Several FOMC policymakers will speak later in the day.
GBPUSD extends slide, closes in on 1.1400
GBPUSD stays under heavy bearish pressure and continues to push lower toward 1.1400 on Wednesday. The cautious market mood helps the US Dollar stay resilient against its major rivals as Wall Street’s main indexes remain on track to open in negative territory.
Gold holds above $1,700 despite US Dollar strength
Gold has lost its bullish momentum following Tuesday’s upsurge and declined toward $1,700 before staging a modest rebound. After having lost over 2%, the benchmark 10-year US Treasury bond yield seems to have steadied above 4.1%, not allowing XAUUSD to regain its traction.