The early signs of a US dollar decline suggest that its downward trend may continue. Investors should pay attention to this week's US third-quarter GDP and the core PCE price index for clues. While significant data is about to be released in the UK, the dominant factor for the GBP/USD trend remains the US dollar. On the technical front, keep an eye on whether the GBP/USD can break the descending trendline.
During the trading session on Monday, October 23rd, the US dollar index dropped by 0.54% to 105.59 as US Treasury bond yields declined. Previously, despite the continuous rise in US Treasury bond yields, strong US economic data, and heightened risk aversion due to the Israeli-Palestinian conflict, the US dollar failed to break through the 107 level, indicating a weakening upward momentum. Hence. Yesterday's decline didn't come as a surprise.
The question now is whether this downward trend can continue. This may be influenced by the high-impact US economic data scheduled for this week, including the US third-quarter GDP data on Thursday, October 26th, and the US September core PCE price index on Friday, October 27th.
UK is Set To Receive Significant Data
Today, the UK is releasing a series of significant data, including September unemployment rate, September unemployment benefit claimants, and October PMI figures. Positive data performance could drive the British pound to continue its rebound, but if the data shows weakness, the pound may face new downward pressure.
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