Events to watch out for today:
09:00 EET. GBP – Unemployment Rate
GBPUSD:
GBP/USD continues to decline to the 1.2840 level in the early European session on Tuesday. The US Dollar remains resilient amid the ongoing Trump trade. Investors will be keeping a close eye on UK employment data due for release later on Tuesday.
Last week, the Bank of England (BoE) decided to cut interest rates by 25 basis points (bps), bringing the bank’s key rate to 4.75%. Bank of England Governor Andrew Bailey told a press conference that the U.K. central bank needs to maintain a “gradual approach” to policy easing.
UK employment data on Tuesday will be closely watched as it could provide some hints on the Bank of England’s policy decision at its December meeting. The UK unemployment rate for the three months through September is expected to rise to 4.1% from 4.0% in the quarter ended August.
In addition, average wages excluding bonuses are forecast to rise by 4.7%, up from 4.9% previously, and average wages including bonuses are forecast to rise by 3.9%, up from 3.8% previously published. If the report comes in stronger than expected, this could provide support for the Pound Sterling (GBP) against the US Dollar.
As for the US Dollar, the likelihood that the Trump administration will propose policies including stiff tariffs, tax cuts and Federal Reserve monetary policy intervention could boost the Dollar and bond yields. Fed officials are likely to increase their cautious tone this week and traders will be more focused on the release of Consumer Price Index (CPI), Producer Price Index (PPI) and US retail sales reports later this week.
Trading recommendation: Trade predominantly with Sell orders from the current price level.
Origin: FreshForex
