- Pound drops modestly on a quiet day for markets.
- US dollar posts mix results weakened by lower yields.
The GBP/USD pair dropped further during the American session at a slow pace and printed a fresh daily low at 1.2919. It trades at 1.2923, holding a bearish bias as it continues to retreat after approaching 1.3000 last week.
The pound lost ground also against the yen and the euro on Tuesday, on a day with limited price action. Still, the pound continues to show some strength as it has been the case since mid-October. Today in the United Kingdom, Prime Minister Boris Johnson and Labor leader Jeremy Corbyn will hold the first debate ahead of the general election.
The US dollar did not benefit today from housing data that showed a strong rebound in October. Lower US yields weighed on the greenback. The 10-year yield dropped below 1.80% for the first time since November 4. Tomorrow FOMC minutes will be released.
“It was a quiet day for financial markets, with light data flow and speakers. However, it was noticeable that fixed income markets rallied despite equity markets being stable, suggestive of a market that remains cautious about the growth outlook. The immediate focus remains on the US-China trade talks, and markets seem reluctant to move much in either direction until they are resolved”, explained ANZ analyst.
GBP fails again near 1.3000
On Monday, GBP/USD reached at 1.2983 the strongest level in almost a month and then pulled back. For the third time in thirty days, the upside in the pair is capped around 1.3000. A consolidation above would clear the way to more gains, probably signaling a resumption of the rally. On the flip side, 1.2915 is the immediate support followed then by 1.2865/70 and then 1.2820.
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