The GBP/USD pair is at US$1.13 as we head into Friday, up one penny from this time yesterday, though lower against Thursday’s intraday highs.
Following hot inflation data in the US yesterday, more aggressive rate hikes from the Federal Reserve are all but certain, possibly leading to a bit of a sell-off of the dollar as traders take profit.
A bearish advantage is forming on the GBP/USD one-hour chart, but some volatile oscillations on a spinning top candlestick suggest neither has the clear upper hand going forward today.
The pound enjoys some momentum against the dollar – Source: capital.com
The euro is also in a stronger position against the greenback, with the EUR/USD pair changing hands at US$0.98; the strongest it’s been in a week.
The bulls are in charge on the one-hour chart, so additional EUR/USD daily gains are possible, though a long-term downtrend is still likely.
Regardless of incremental gains against the dollar for the G10 set – the Australian, New Zealand and Canadian dollars are all gaining traction too – USD remains the long-term favourite.
At 147.4 per USD, the embittered Japanese yen is the one G10 currency failing to make any short-term progress.
EUR/GBP is sitting at 86p, a 2p decline against the day. That dip could extend even further should chancellor Kwasi Kwarteng U-turn on his contentious corporation tax breaks.
The prospect of a U-turn will surely be the big talking point around today’s forex water cooler.