• Home
  • Contact
  • Privacy Policy
  • Store
my forex coaching
  • For Beginners
  • Strategies
  • Crypto
  • Technical Analysis
  • Stock Trading
  • Product Reviews
  • News
  • Videos
No Result
View All Result
  • For Beginners
  • Strategies
  • Crypto
  • Technical Analysis
  • Stock Trading
  • Product Reviews
  • News
  • Videos
No Result
View All Result
my forex coaching
No Result
View All Result
Home Forex News

Kwarteng Announces Tax Cut U-Turn, GBP Turns Higher

Forex Tips by Forex Tips
October 3, 2022
in Forex News
0
Kwarteng Announces Tax Cut U-Turn, GBP Turns Higher
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter


Sterling (GBP) News and Analysis

  • Pound Sterling lifts on UK tax cut reversal
  • GBP/USD attempts to recover recent losses but fundamentals remain weak
  • Major event risk: Tory party conference, US PMI data and non-farm payrolls (NFP)

Recommended by Richard Snow

See What our Analysts Forecast for Q4

Pound Sterling Lifts on UK Tax Reversal

The UK government, led by Liz Truss announced a remarkable reversal of the planned tax cuts for the UK’s highest earners this morning. The tax cuts were just part of a wholly unconventional fiscal policy announced by the chancellor on Friday the 23rd of September that resulted in a massive loss of confidence in UK assets and the current government as the pound plummeted and UK gilts sold off at an alarming rate.

The optics surrounding tax cuts for the rich while refusing to commit to increasing welfare benefits in line with inflation has played right into the Labor party’s hands as recent polls suggest a widening preference for Labor leadership. The decision to reverse the tax cuts, no doubt the result of pressure from the conservatives, resulted in a slight lift in the pound as the local currency attempts to recover lost ground.

GBP/USD 30-Minute Chart

image1.png

Source: TradingView, prepared by Richard Snow

The daily chart reveals what looks like indecision around levels witnessed shortly after Finance Minister Kwarteng revealed the mini-budget on the 23rd of September as prices plummeted. However, the doji candle would need to persist into the daily close as there is still plenty of time in the trading session for subsequent price movement.

Price action has come a long way since the massive drop towards 1.0340. If further revelations about policy reform make their way to the news wire, we could see cable push toward today’s high at 1.1282 and even the descending trendline which connects multi-month highs.

However, when observing sterling, the market is extremely reactive to news flow at the moment meaning a move lower cannot be ruled out, particularly if Liz Truss remains resolute on other aspects of the recent fiscal proposals. 1.1110 appears as near-term support followed by the very distant 1.0547.

GBP/USD Daily Chart

image2.png

Source: TradingView, prepared by Richard Snow

Main Risk Events of the Week

Front and centre will be revelations coming out of the Tory party conference with Kwarteng speaking this morning and Liz Truss having her turn on Wednesday. Also on Wednesday, we have September services PMI data for the US where the figures are anticipated to show a slight drop but still remains in expansionary territory (above 50). On Friday we have US non-farm payroll (NFP) data once again, where the jobless rate is assumed to remain at 3.7% and another 250k jobs being added. If US data continues the uptrend, this allows more room for the Fed to tighten aggressively – weighing on cable over the medium term.

image3.png

Customize and filter live economic data via our DaliyFX economic calendar

Trade Smarter – Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

— Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnowFX





Source link

Share76Tweet47

Related Posts

EUR/USD Takes a Breather as Prices Test Support

EUR/USD Takes a Breather as Prices Test Support

by Forex Tips
March 24, 2023
0

Euro Dollar (EUR/USD) Talking Points:EUR/USD clings to the 50-day moving average (MA) as prices struggle to break free from...

XAU/USD Slips but Retains Bullish Bias on Bank Sector Mayhem

Gold Gains After Fed’s Dovish Hike Reinforces Bullish Trend, Breakout in Play

by Forex Tips
March 23, 2023
0

GOLD PRICE FORECAST:Gold prices rise following the Fed’s dovish hike at its March FOMC meetingThe U.S. central bank raised...

US Dollar Wavers Ahead of Fed Decision. What Should Forex Traders Expect?

US Dollar Wavers Ahead of Fed Decision. What Should Forex Traders Expect?

by Forex Tips
March 22, 2023
0

US DOLLAR OUTLOOK:U.S. dollar lacks directional conviction, moving between small gains and losses, as traders avoid taking large positions...

Prices Extend Recovery as Banking Sector Jitters Fade

Prices Extend Recovery as Banking Sector Jitters Fade

by Forex Tips
March 21, 2023
0

WTI CRUDE OIL OUTLOOK:Oil prices rise as risk assets extend their reboundThe easing of turmoil in the banking sector...

UK Stocks Rally as Markets Contemplate Overreaction

UK Stocks Rally as Markets Contemplate Overreaction

by Forex Tips
March 20, 2023
0

FTSE 100 News and AnalysisFTSE posts intra-day recovery as markets digest extreme sellingBy design, the FTSE appears vulnerable to...

Load More

Recent Posts

  • Forex Tips: Facebook Stock
  • Fed Barkin: The case for raising rates this week was pretty clear
  • Venture capitalists bail on Zipmex bailout, company warns of consequences: Report
  • EUR/USD Takes a Breather as Prices Test Support
  • Eurozone March consumer confidence flash-19.2 vs -19.0 prior
Forex Pulse Detector

Categories

  • Alerts
  • Crypto Strategies
  • Currency
  • For Beginners
  • Forex News
  • Forex Trading Tips & Strategies
  • Technical Analysis
  • Videos

Newsletter

  • Home
  • Contact
  • Privacy Policy
  • Store

© 2018 Forex Blog

No Result
View All Result
  • Contact Us
  • Homepages

© 2018 Forex Blog.