GBP/USD steady hovering around 1.1300, Sunak to become PM on Tuesday
- GBP/USD remains steady but pound pulls back versus other rivals.
- UK: Rishi Sunak will become UK Primer Minister.
- US S&P Global drops more than expected in October.
The GBP/USD is hovering around 1.1300 since the beginning of the American session, unable to benefit from a modestly weaker US dollar. Economic data from the US came in below expectations while Sunak was confirmed as the next UK PM.
Cable peaked after the weekly opening at 1.1410 and then pulled back to as low as 1.1271. During the last hours is has been moving between 1.1340 and 1.1275.
New PM in the UK, weak data in the US
Rishi Sunak will become UK Primer Minister after Penny Mordaunt dropped out of the Tory race on Monday. The transition from Liz Truss to Sunak could take place on Tuesday. The government announced that is up to Sunak to decide whether to announce a fiscal plan on October 31. Speaking to Tory MPs, Sunak said there will be no early election.
The confirmation of Sunak was no surprise for markets as it was already priced after Boris Johnson pulled out of the race on Sunday. After a spike higher at the beginning of the week, the pound has been pulling back. EUR/GBP is back above the level it closed on Friday, above 0.8735.
The US dollar lost momentum during the American session weakened by the US S&P Global PMI preliminary October report. The Manufacturing Index dropped more than expected to the lowest level in 28 months and below the 50 level. US yields remain higher for the day despite the economic report. The 10-year yield stands at 4.25% and the 2-year at 4.51%.
Technical levels