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RationalFX: Sterling loses ground against both majors

RationalFX: Sterling rates fell against both majors to multi months lows trading towards the 1.34, and towards 1.15 for GBP/EUR mark.

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RationalFX


GBP

As the pound is a risk sensitive currency, investors have now started to put more assets into safe-havens adding even more pressure on sterling’s strength.

The highly talked about energy crisis has now been exacerbated by a shortage of fuel at forecourts, giving us a clearer idea why the slowdown of sterling has emerged. However, the support of the Bank of England should remain a driver due to its hawkish stance in recent weeks.

GDP data for the UK is out this morning and the consensus for today is 22.2%, while unemployment data in Europe is projected at 7.5%, expected to remain unchanged.

USD

Yesterday saw the dollar reach a one year high against major currencies, this is due to the fact that the Federal Reserve (Fed) is expected to slow on asset purchases starting in November. Although Fed’s Chair Jerome Powell has all but confirmed that tapering will happen, the general outlook is that the Fed is moving towards an interest rate hike, possibly in late 2022.

Key announcements

6:00 – UK GDP data release

14:00 – Jerome Powell’s speech

Source : ETFWorld.co.uk

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