GBP should have a tough start of the year .

Economists at TD Securities maintain a bearish view on the Pound and expect the British currency to struggle at the start of 2023.Further terminal rate divergence between the Fed/BoE

“GBP should have a tough start of the year, reflecting a mix of external and local factors.” “On the global side, the USD outlook will feature prominently in the gyrations of GBP. We anticipate further terminal rate divergence between the Fed/BoE, especially as UK growth looks vulnerable to housing risks.”

“Fiscal prudence comes at a cost, likely undermining UK growth relative to the rest of the G10. In turn, low real rates and weak growth won’t capture the capital flows needed to plug the current account balance. GBP remains the shock absorber.” 

EURUSD retreats below 1.0400 as US Dollar rebounds

EURUSD has lost its bullish momentum and retreated below 1.0400 following a sharp spike in the early American session. The US Dollar Index, which dropped to multi-month lows after soft PPI data, managed to recover above 106.00, limiting the pair’s upside.

EUR/USD News 

GBPUSD clings to strong daily gains near 1.1900

GBPUSD has erased a portion of its gains after having jumped above 1.2000 earlier in the day. Nevertheless, the pair is still up more than 1% on the day, supported by the improving market mood following the weaker-than-expected US producer inflation data.

GBPUSD News 

Gold keep advancing on broad dollar weakness

Gold extended its rally to $1,786,46 on Tuesday as the American Dollar accelerated its slide following the release of the US PPI, further hinting at easing inflationary pressures in the US. According to the BLS, the wholesale inflation annual rate came at 8% in October.