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GBP/USD jumps from below 1.1700 to the 1.1850 zone

  • Pound erases losses against USD, EUR and CHF. 
  • Wall Street indexes up by more than 3%, after having on Tuesday the best day in 87 years. 

The GBP/USD pair bounced sharply, rising more than two hundred pips from the daily low and it is back in positive territory for the day. The bounce took place amid a decline of the US dollar and as Wall Street extends gains. Cable bottomed at 1.1633 and recently tested 1.1840/50. As of writing trades at 1.1800/10, modestly higher for the day. 

DXY tumbles to fresh lows 

Equity prices in the US broke higher over the last hour. The Dow Jones is up 6% and the Nasdaq 3.1%. US yields are falling on Wednesday, the 10-year stands at 0.80%. As Wall Street jumped to fresh highs, the US Dollar Index broke lower. The DXY trades at 101.15, about to test the 101.05/10 support (Mar 20 & 23 low), down 0.88%. 

The weaker greenback boosted GBP/USD back to positive territory. Risk appetite across financial markets on Wednesday favors particularly main European and emerging market currencies. 

Economic data from the UK (inflation) and from the US on Wednesday was mostly ignored by market participants. On Thursday, the Bank of England will announce its decision from the Monetary Policy Committee and release the minutes of that meeting and also the minutes from the March 19 emergency meeting. In the US, initial jobless claims number are expected to show a large increase.  

Technical levels 
 

 

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