- Pound remains unaffected by Brexit headlines as the deadline looms.
- US Dollar reverses and falls against majors as US yields tumble.
The GBP/USD pair peaked at 1.2323 during the American session, slightly below yesterday’s top and as of writing, it is hovering around 1.2300, flat for the day. The pair managed to erase losses for the second-day in-a-row. Today it bottomed at 1.2226 before bouncing back to 1.2300.
Wall Street plummets on worries about growth, US Dollar drops
The DOW JONES dropped more than 500 points on Wednesday as US economic data continues to fuel concerns about a global slowdown. “The only relevant data was the US private employment data, which grew less than expected in September (135k, consensus 140k, prior 157k) with the prior month’s gain downwardly revised, increasing concerns about the global economic cycle, especially after yesterday’s weak manufacturing figures in the US. All eyes will be on Friday’s non-farm payrolls, as a tone of caution prevails in financial markets,” said BBVA analysts.
Tomorrow, service sector data is due ahead of Friday’s official employment report. According to US President Trump, the decline in equity prices is the result of the “impeachment nonsense.” US yields are sharply lower today as demand for safe-haven assets soared. The Greenback weakened across the board on the bond rally.
GBP ignores a new set of Brexit proposals
Today, UK PM Boris Johnson outline a new set of proposals for Brexit. Johnson also spoke with EC President Jean-Claude Juncker. European Union negotiator Michel Barnier said that progress is being made on Brexit, but warned a lot of work remains. More meetings between EU and UK negotiators will take place over the next days.
The new headlines had a limited impact on the Pound. Price action in GBP/USD was mostly explained by the US Dollar. It followed (inversely) the DXY. Since last Friday, Cable has been unable to move away from the 1.2280/1.2300 area.