The highlight of Tuesday’s session was a broad-based sell-off in the US dollar, likely fuelled by expectations for a weaker economic outlook and consequently slower pace of rate hikes.
Softer US economic data has shown up twice this week. Firstly, relating to services and manufacturing PMIs for October on Monday. Secondly, yesterday’s house price data revealed the first back-to-back fall for an extended period.
This triggered weakness in the buck which helped the EURUSD pair rise towards $1.10 and cable (GBPUSD) to probe the $1.15 level. Both pairs have come off slightly but for the moment it appears love for the greenback is waning.
Written by Viv Savani. 8:11am, October 26th 2022
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