Yesterday morning was all about Brexit positivity which saw GBPUSD rally to just shy of 1.34, a price last seen on 1st September, taking full advantage of a weaker dollar. The positivity was again headline driven from the media and had little in the way of hard facts to back it up, making it somewhat shaky to begin with. GBPEUR for the third time in three months stalled at 1.1280 which is now clearly an area of technical resistance – the average rate for GBPEUR in 2020 has been 1.1268.
The US PMI figures released yesterday came in way above expectation with 56.7 versus 53 expected. This triggered GBPUSD to drop from 1.3397 to 1.3264, representing a 1% move. This type of economic data volatility may have come as a bit of a surprise given the majority of the market’s focus has been on covid-19 related economy issues and central bank behaviour.
The dollar has begun today on the backfoot again with AUDUSD and NZDUSD moving nearly 1% higher, and GBPUSD EURUSD both notching up 0.25% . Thursday is a national holiday in the US so the markets may be quieter than usual as the week draws to a close.
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Have a great day.
Author: Alistair Hutson, Senior Relationship Manager.
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