Pound Strengthens As European Shares Gain
October 31 2023 - 3:25AM
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The pound firmed against its major counterparts in the European
session on Tuesday, as European stocks advanced amid positive
earnings results, while investors awaited the Federal Reserve's
monetary policy meeting for clues on the interest rate path.
The Fed is expected to hold rates steady at the end of its
two-day meeting that starts today.
Investors focus on U.S. reports on home prices, consumer
confidence and Chicago-area business activity due to be published
later in the day.
Earlier today, an official survey showed Chinese manufacturing
activity unexpectedly returned to contraction in October, and the
Bank of Japan announced a tweak to its yield curve control
policy.
Traders watched the latest developments in the Middle East after
Israeli Prime Minister Benjamin Netanyahu rejecting calls for a
ceasefire in the war against Hamas.
The pound advanced to a 1-week high of 1.2200 against the
greenback, 1-1/2-month high of 183.83 against the yen and a fresh
2-week high of 1.1004 against the franc, from its previous lows of
1.2136, 181.27 and 1.0951, respectively. The pound is seen finding
resistance around 1.24 against the greenback, 185.00 against the
yen and 1.11 against the franc.
In contrast, the pound weakened against the euro, touching
nearly a 6-month low of 0.8754. If the currency slides again, it
may find support around the 0.89 area.
Looking ahead, Canada GDP data for August, U.S. employment cost
data for the third quarter, U.S. Redbook report, U.S. S&P
Case-Shiller home price index for August, U.S. Chicago PMI for
August, U.S. consumer confidence for October and U.S. Dallas Fed
services index for October are set to be published in the New York
session.
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