- GBP/USD attempts a bounce but remains vulnerable.
- DXY advances while the European equities rebound.
- The UK’s Brexit and fuel crisis to keep the rebound capped ahead of Bailey, Powell.
GBP/USD is witnessing good two-way businesses, as the European session kicks off this Wednesday.
At the press time, the cable is attempting a quick bounce from fresh eight-month lows of 1.3505, trading at 1.3540, up 0.07% on the day.
The major stalled its steady Asian recovery and ran into fresh supply as the European traders hit their desks, digesting the renewed concerns over China Evergrande, a potential US government shutdown and the ongoing UK’s petroleum problem.
The risk-off flows revived the safe-haven demand for the US dollar, prompting the USD bulls to regain the upside momentum, despite the retreat in the Treasury yields across the time horizon.
However, with the European stocks rebounding, investors turn cheerful once again, backing the solid comeback in the currency pair. The UK FTSE 100 is adding 0.70% on the day while the pan European Euro Stoxx 50 is advancing nearly 1%.
Looking ahead, it remains to be seen if GBP/USD manages to sustain the bounce, as the Fed’s hawkish expectations will continue to play out in favor of the yields and the dollar. Also, investors will closely eye the speeches by Fed Chair Powell and BOE Governor Bailey for fresh trading impetus.
