Forex snapshot

The US dollar strengthens slightly following confirmation of last night’s Republican control of the senate.

Cable drifting lower

Last night’s success for the Republican party was not a complete surprise, and the moves in GBP/USD have been subtle rather than reactive. Having briefly popped its head above the $1.60 level, it is once again drifting lower. With trader’s conscious of tomorrow’s Bank of England interest rate event and the accompanying Monetary Policy Committee statement it is unlikely we will see the GBP/USD rate move too far from here.

Before the excitement of tomorrow we are still to see the latest services PMI figures for the UK, and regardless of the improvements seen in manufacturing this is still a sizeable contributor to the general health of the UK.

Over the next 24 hours it is likely that $1.60 will continue to be a cap on the GBP/USD rate, but sentiment is unlikely to see the spot levels move too far away from it.

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