USD continued to weaken through yesterday's trading session ahead of an auction of 20-year treasuries, as markets continued to move on last week's market narratives. GBP moves were broadly lower as well, despite higher risk appetite and equities finishing higher.
Governor Bailey warned that UK interest rates may have to rise further, given there is an upside risk on food and energy costs rising again. No impact on GBP or interest rate markets as of yet.
* Daily move - against G10 rates at 7:30am, 21.11.23
** Indicative rates - interbank rates at 7:30am, 21.11.23
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The theme for a weaker USD continues this morning, with GBPUSD and EURUSD continuing to grind out further gains. But as per our report yesterday, we are increasingly getting into a market where the greenback is actually looking oversold, however a catalyst is needed to change the fortunes of the dollar. It doesn’t seem we’ll be getting that today, with existing home sales expected to come in at a 13-month low. The FOMC minutes is unlikely to have much of an impact, unless there is an overtly hawkish tone from the meeting.
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