British Pound nears seven-week high as US elections weaken USD, BoE looms
The Pound Sterling (GBP) rallies to a seven-week high against the US Dollar (USD) on Wednesday after the US midterm elections, in which the Democrats are poised to win the US House of Representatives and the US Senate.
The British Pound Sterling (GBP) reached a seven-week high against the US Dollar (USD) on Wednesday, following the US midterm elections that favored the Democratic Party. This outcome posed a challenge for US President Donald Trump, who had previously backed the Republicans. At the time of reporting, GBP/USD was trading around 1.3500, marking a 0.55% increase.
The US Dollar Index (DXY), which gauges the USD's performance against six currencies, saw a slight decline to 101.41. Analysts suggested that the US markets fared better when no single party could pass legislation through a party-line majority. In Iran, talks continued despite Iran alleging a US drone had been destroyed. Despite this, oil prices saw a slight dip due to speculation of a potential deal between the US and Iran.
Data from the US revealed a softer ISM Services Purchasing Managers' Index (PMI) for October, coming in at 54.5, below the estimated 54.8. Meanwhile, in the UK, attention was focused on the Bank of England's (BoE) policy decision scheduled for Thursday, with markets anticipating a rate hike. The US economic calendar included the release of Initial Jobless Claims and speeches from Federal Reserve officials on Thursday, with a keen interest on Friday in the Nonfarm Payrolls report, expected to show a gain of 65,000 jobs.
The GBP/USD pair was seen as showing a bullish outlook, sticking above its simple moving average and a downward trend line break.
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