Daily Forex Report 07-Nov-2022: GBP dips and recovers, euro gains on sterling

Cable weighs a possible Republican upset in the US mid term elections

Cable pulled off a nearly 2% dip and recovery at the end of last week as traders digested jumbo rate hikes on both sides of the Atlantic, as well as mixed signals from the US jobs market.

On the one hand, wages grew more than expected – 0.4% compared to 0.3% projections – to weigh on inflation fears, but unemployment rates of 3.7% also outpaced expectations of 3.6%.

Price action appears more muted this morning, with GBP/USD changing hands at US$1.131, having knocked some 15 pips off from yesterday.

The week ahead is fairly quiet on the economic calendar front, but as you may have heard, the US mid-term elections kick off tomorrow.

With inflation pinned as one of, if not the, key issues, could a Republican upset trigger a rally on the US Dollar Index?

GBP/USD: Will a Republican upset cause the pound to dip? – Source: capital.com

We’ll see.

As for EUR/GBP, the pair is changing hands at 87.8p, and looks likely to break above the 87.9p high seen on October 12.

Having rallied hard at the end of last week, EUR/USD has pulled back slightly; parity continues to act is a strong resistance point.

The pair is currently trading at US$0.9928.

Checking in on the Japanese yen, there appears to be some stability, with the US dollar failing to retest the critical 150 yen point for going on three weeks.

At the time of writing, the USD/JPY pair is changing hands at 147.48.

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