• The Pound Sterling rebounds marginally as the UK OBR reported that the £30 billion fiscal gap has narrowed to £20 billion.
• Weak UK economic data has supported bets of another interest-rate cut by the BoE.
• The US Bureau of Labor Statistics said it will publish delayed economic data soon, but the exact timing isn't available yet.

The Pound Sterling (GBP) recovers some of its earlier losses against its major peers during the European trading session on Friday. The British currency attracts some bids as the United Kingdom (UK) Office for Budget Responsibility (OBR) has reported that stronger receipts and robust wage performance have narrowed the £30 billion fiscal gap to £20 billion.

A modest improvement in the UK economy's fiscal position has led to a slight decline in surging gilt yields, some recovery in the Pound Sterling, and relief for policymakers. At the time of writing, 10-year UK gilt yields have dropped to 4.51% from THEIR intraday high of 4.56%. Still, they are 1.8% higher than their previous close.

Earlier in the day, 10-year UK gilt yields soared, weighing on the British currency, following reports from the Financial Times (FT) signaling that Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves might scrap their plans to raise basic and higher tax bands in the upcoming Autumn Budget on November 26.

The FT reported that the UK government could avoid increasing the burden on individuals and might look for other non-direct revenues to cover the £30 billion fiscal gap.

A few weeks ago, Reeves stated that the administration might need to reconsider its election manifesto’s promise not to hike households’ taxes to fund the stopgap bill.

The absence of tax hikes could prompt fiscal debt risks by increasing interest obligations on the government's debt.
 

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the New Zealand Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
 

Daily digest market movers: US BLS to start releasing economic data soon

• The Pound Sterling trades 0.4% lower to near 1.3130 against the US Dollar (USD) during the European trading session on Friday. The Pound Sterling remains on the back foot, while the US Dollar is also under pressure as investors turn cautious ahead of the publication of key United States (US) economic data releases that were halted due to the government shutdown.
• At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower to near 99.15, close to a two-week low of 99.00 posted on Thursday.
• The US Bureau of Labor Statistics (BLS) said that it will publish the updated schedule of delayed economic data on its website soon. The release of the US economic data would significantly influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.
• On Thursday, White House Economic Council Director Kevin Hassett said in an appearance on Fox News that the upcoming labour data release won’t include the Unemployment Rate data.
• Meanwhile, traders have trimmed Fed dovish bets for the December policy meeting as a slew of policymakers have warned of upside inflation risks. “The Fed needs to proceed with caution now, and continue to lean against inflation," St. Louis Fed President Alberto Musalem said on Thursday.
• In the UK, intensifying expectations of an interest rate cut by the Bank of England (BoE) for the December policy meeting are also being a drag on the Pound Sterling. BoE dovish bets have accelerated following weak employment data for three months ending September and the flash Q3 Gross Domestic Product (GDP) data. The ILO Unemployment Rate jumped to 5%, while the economy expanded by a marginal 0.1%.
• Next week, investors will focus on the UK Consumer Price Index (CPI) data for October, which will be released on Wednesday.
   

Technical Analysis: Pound Sterling sees more downside towards 1.2700
 

(Click on image to enlarge)

The Pound Sterling declines to near 1.3130 against the US Dollar on Friday. The overall trend of the pair remains bearish as it trades below the 200-day Exponential Moving Average (EMA), which is around 1.3276.

The 14-day Relative Strength Index (RSI) struggles to stay above 40.00. A fresh bearish momentum would emerge if the RSI resumes its downside journey.

Looking down, the April low near 1.2700 will act as a key support zone. On the upside, the October 28 high around 1.3370 will act as a key barrier.

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