In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes reports...
How will Sunak's Election Affect the Pound?
2022-10-25 • Updated
On Monday, October 24, Rishi Sunak was elected the new UK Prime Minister. After the significant failure of the previous Prime Minister Liz Truss, whose plan for tax cut dumped the GBP and bond markets, a new PM has to find ways to return international investors' trust in the UK economy and slow down the inflation growth.
What to expect?
"Difficult decisions await us next", - Sunak said at the first press conference as Prime Minister of Great Britain.
In our view, Sunak will take tough steps against inflation in the first days of work. On November 3, the Bank of England will decide whether it will raise the key rate by 50- or 75-basis points. Despite its formal independence, the BOE might choose a more hawkish scenario for the key rate, strengthening the GBP against other currencies.
EURGBP, H4 timeframe
EURGBP bounced off the descending trend line, highlighting the pair's weakness. We expect the price to keep declining toward 0.8625, 0.8580, and 0.8540.
Traders might consider selling the pair if the price touches the resistance trend line once again or after the price breaks below 0.8660.
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USD/CHF saw a rebound after declining for two days straight, climbing towards the important psychological level of 0.8800 during Wednesday's early Asian trading session. There's some pressure on the Swiss Franc (CHF) as traders await the Swiss ZEW Survey – Expectations report scheduled for later today. Moreover, investors are keeping...