GBPUSD recovers as inflation in focus
Cable clawed back some losses as traders await a new set of readings on the UK’s inflation and job market. Market participants see little chance of another BoE rate hike at the November meeting, but the possibility of another increase next year cannot be excluded, especially after officials commented that more aggressive measures may be needed if inflation is stuck above the target for a prolonged period of time. A still hot CPI combined with resilient employment data would lead the market to price in further tightening, putting the rate differential in favour of the pound. 1.2500 is a major supply area and 1.1800 the next key support.
AUDUSD struggles amid China woes
Weak sentiment about China’s economy takes a toll on the Australian dollar. With the IMF cutting its growth forecasts for China, Australia’s largest trading partner, amid its property crisis and Sino-US tensions, the aussie as a proxy may struggle to stay attractive. Domestically, a comment from RBA officials acknowledged that the impact of rate hikes has become visible, reining in consumer spending to lower inflation. As most major central banks have hit the pause button in their quantitative tightening,…
