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GBPUSD reverses a two-day advance to surpass 1.1900 on cautious sentiment ahead of the UK Autumn Statement
GBPUSD reaffirms intraday low on cautious market sentiment ahead of the big UK event. The British government's capacity to calm economic anxieties and close the budget gap will be closely observed. The US Dollar's corrective bounce serves as an additional trading filter. Second-tier US data and risk catalysts also have a significant role in intraday market movement.
GBPUSD accepts offers to renew intraday lows near 1.1880 on Thursday morning. In doing so, the Cable pair suffers its first daily loss in three days, validating the market's caution ahead of the UK's crucial Autumn Statement.
Prime Minister Rishi Sunak is more likely to appease the economic troubles by proposing relief measures such as reducing energy bills, boosting the minimum wage, and attempting to make tax increases less problematic than his predecessors. However, UK Chancellor Jeremy Hunt is more concerned with creating a tax framework that can fill the multibillion-pound (GBP) deficit.
Rishi Sunak's less obsessive efforts to tighten the Bank of England's (BOE) monetary policies, as compared to Liz Truss' aggressive drive for higher interest rates, also challenge the BOE hawks and weigh on the GBPUSD exchange rate.
Nonetheless, during his appearance on Wednesday, BOE Governor Andrew Bailey demonstrated a willingness to announce additional rate increases. Despite solid US Retail Sales figures, the largely pessimistic comments from US Federal Reserve (Fed) policymakers further encourage GBPUSD buyers.
In October, US Retail Sales grew by 1.3% month-over-month vs 1.0% projected and 0.0% previously. On the other hand, Kansas City Fed President Esther George and Fed Governor Christopher Waller both recommended modest future rises in benchmark interest rates, whilst San Francisco Fed President Mary Daly cited obstacles to economic growth in the United States.
Elsewhere, Covid issues in China and fears of political gridlock in the United States threaten market confidence and entice GBPUSD sellers prior to the crucial UK Autumn Statement. Prior to the fiscal policy announcements, the Financial Times (FT) stated, "Hunt's Autumn Statement will exacerbate the financial hardship faced by millions of Britons and usher in years of austerity in public services, but the chancellor will claim the pain is necessary to curb soaring prices and restore faith in Britain."
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