Despite catching “fresh bids during the European session” on Tuesday morning, Cable came under significant selling pressures in the afternoon, closing the day back in the 1.32 range. Cable’s early morning advances were down to USD weakness as opposed to Sterling strength. The Dollar was weak due to the US 10-year Treasury yield sliding back down below 1.50% “on revived Omicron fears”. However, in the afternoon, after Federal Reserve Chairman Jerome Powell indicated that “the central bank could step up the removal of its efforts to boost the economy as it battles escalating inflation pressures”. Speaking before a Senate committee Powel said, “he thinks reducing the pace of monthly bond buys can move more quickly than the $15 billion-a-month schedule announced earlier this month”. He went on to note that at present, the economy “is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases”. The Dollar was able to make upside moves on this news, as it looks like the Fed’s December meeting will be a productive one.
Having started the session at 1.3350, GBPUSD quickly came under downside pressures and closed the day at 1.3253.
GBPEUR also made a loss on Tuesday, falling below the 1.1750 mark. The pair opened at 1.1763 and closed at 1.1740.
EURUSD also fell on Tuesday as the Dollar regained its strength in the afternoon. The pair opened at 1.1349 and closed at 1.1288.
On the data front it’s a packed schedule today. Already this morning Germany have released its October Retail Sales and Manufacturing PMI for November. The ECB held a Non-Monetary Policy meeting at 08:00 and released its Manufacturing PMI for November. At 09:30 the UK will also release its latest Manufacturing PMI, followed by a speech from Bank of England Governor Andrew Bailey at 14:00. Then from the US in the afternoon, Market and ISM Manufacturing PMIs will be printed from 14:45.
