Daily Forex Market Report 18-Nov-2022: GBP bounces back after autumn statement dip, US Dollar Index cedes ground

Euro gaining against greenback in anticipation for Largarde’s speech

Yesterday’s delayed autumn statement from UK chancellor Jeremy Hunt was backloaded with high-level stealth taxes yet “low of wealth-creation, piling more pressure on the UK’s 5.5 million small businesses, their employees and customers”.

That’s according to Martin McTague, chair of the Federation of Small Businesses.

UK 10-year gilts fell as a result, as buyers demanded higher yields going forward.

Cable immediately dipped to an intraday low of US$1.176, but the pound quickly recovered and at the time of writing, is changing hands at US$1.19.

GBP adjusts to stealth tax-heavy autumn statement – Source: livecharts.co.uk

Some of Sterling’s gains were to do with the relative weakness of the greenback, which has dropped 0.15% on the US Dollar Index to 106.120 in this morning’s Asia trading window.

The pound gained against the euro, with the EUR/GBP pair dropping 0.3% to 87.09p this morning.

On today’s economic calender, UK retail Sales decreased 6.1% year-on-year, marking the sixth consecutive month of falls as consumer demand declines in response to inflation.

European Central Bank president has a speech scheduled at 9.30am. Hawkish comments could bait the euro bulls and create upside potential against the US dollar.

EUR/USD has already made gains in today’s Asia session after recovering from yesterday’s intraday lows of US$1.030.

The pair added around 20 pips, bring the pair’s exchange price to US1.037.

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