As DXY declines, GBP/USD reaches five-month highs above 1.2300.

VOT Research Desk

A weaker US Dollar overall has helped the GBP/USD have its finest day in weeks. In relation to the euro, the pound is also increasing.

Cable reached its highest point since June at 1.2310 before falling back to 1.2260.

The US Dollar extended its plunge that began on Wednesday after Fed Chair Jerome Powell’s speech, but it has now pared its losses and is still substantially lower.

During the December meeting, rates will be raised once more, but more slowly. The dollar is falling dramatically as a result of expectations for a less aggressive Fed.

The publication of economic statistics on Thursday revealed indicators of lowering inflation (decreases in the Core PCE and the Prices Paid Index of the ISM Manufacturing) and deteriorating economic conditions. sector of manufacturing (ISM Manufacturing fell in November to 49).

The Pound is strengthening against the Euro in addition to the Dollar’s decline. The EUR/GBP dropped to 0.8552, its lowest level since August 30, after breaching the crucial support level of 0.8570.

Another encouraging technical development for the bulls is that the GBP/USD is approaching its first closure above the 200-day Simple Moving Average (it is now trading at 1.2150).

The resistance level to break is 1.2300, and spot pricing has so far been unable to consolidate above it. If it does, it will allow for more rises.