The rates continue within the upward trend. The pound is under pressure due to uncertain perspectives of a deal with the EU. However, it is still stronger than the yen. The risks associated with the pandemic are growing, and this month we observe new measures to prevent the development of the pandemic in the UK. Therefore, analysts note that there will be only limited further strengthening of the pound in October. At the same time, approaching November, volatility will be high due to the upcoming US elections, which significantly affects the cost of safe assets.
This week the pound continued to grow, thanks to positive signals regarding the conclusion of the deal with the EU before the deadline, as well as due to data published on the PMI indices in the services, manufacturing and construction sectors, which all turned out to be better than the forecasts in September. The probability of the rate cut below zero remains high, but this can only happen in the middle of next year, according to the forecasts.
In the near future, we will receive a series of reports on the economy of Japan and China, which will affect the demand for safe assets. Fundamental factors continue to have a key impact on currency pairs with the pound. However, taking into account the Stochastic oscillator's signal, we believe that the deals to sell are the most effective.
