• The GBP/USD exchange rate recorded an increase in mid-week trading, with some analysts attributing the weakness of the US dollar to the strong performance of US presidential candidate Kamala Harris.
• However, its gains that reached the resistance level of 1.3111 evaporated quickly with the US dollar’s gains against other major currencies following the announcement of US inflation figures through the Consumer Price Index.
• As a result, the GBP/USD pair plummeted to the psychological support level of 1.3000 and is currently stabilizing around the 1.3045 level.

Commenting on the performance of the forex market, Francesco Pisol, a forex market analyst at ING N.V., said: “The weakness of the dollar (and bitcoin) across the board, the outperformance of Asian emerging market currencies, and the weakness of US equity futures are consistent with polls suggesting that Harris outperformed Trump in the first presidential debate.”

Registered voters who watched Tuesday’s presidential debate between Trump and Harris “overwhelmingly” agreed that Kamala Harris outperformed Donald Trump, according to a CNN poll of debate watchers conducted by SSRS. The vice president also exceeded the expectations of debate watchers for her performance and Joe Biden’s performance on the stage against the former president earlier this year, according to the poll. According to analysts, “The US dollar has weakened by about 0.3% after the US presidential debate,” and “Based on the reaction of financial markets, Vice President Harris is the winner of the presidential debate.”

Overall, the PredictIt betting market shows that US Vice President Harris now has a 10-point lead over President Trump compared to nearly equal odds before the debate. Regarding the debate, the position among forex analysts is that a Trump presidency would, on the whole, be supportive of US dollar exchange rates. Harris’ strong performance is pushing back against this outcome and the dollar.

Meanwhile, financial markets appear to have given Harris a point victory. In the forex market, a Trump win is linked to the strength of the US dollar, which is trading on the weak side across the board.

The GBP/USD exchange rate was under pressure in September, with the strong rally seen in late August tapering off. Analysts say that September is a seasonally strong month for the US dollar, but it could weaken later in the year amid a number of interest rate cuts by the Federal Reserve.

However, one area of ​​uncertainty is the outcome of the presidential election, meaning the debate was closely watched by markets.

According to Forex trading, the conversion of the British pound to the US dollar fell to 1.3000 on Tuesday before recovering to 1.3111 on Wednesday, although the release of disappointing UK GDP had a negative impact.

What happened to the US inflation figures?

The rise in US inflation after the pandemic slowed further last month as annual price increases hit a three-year low, paving the way for the Federal Reserve to cut US interest rates and likely shape the economic debate in the final weeks of the presidential race. A Wednesday report from the Labor Department showed that US consumer prices rose 2.5% in August compared to a year ago, down from 2.9% in July. This was the fifth consecutive annual decline and the smallest since February 2021. From July to August, prices rose by just 0.2%.

Excluding volatile food and energy costs, so-called core prices rose 3.2% in August compared to a year ago, the same as in July. On a monthly basis, core prices rose 0.3%, a slight rebound from July’s 0.2% increase. Economists are closely watching core prices, which typically provide a better reading of future inflation trends.

For months, the slowdown in inflation has provided gradual relief to American consumers, who have been hit by rising prices that began three years ago, especially for food, gas, rent, and other necessities. Historically, Inflation peaked in mid-2022 at 9.1%, the highest rate in four decades. American wages have been rising steadily over the past three years. Even total incomes have outpaced inflation for nearly 18 months, helping more families cope with higher prices. On Tuesday, the Bureau of Statistics reported that the median US family income, adjusted for inflation, rose 4% last year to more than $80,000, which is essentially in line with the 2019 peak.

Wednesday’s inflation figures came on the heels of a Tuesday night presidential debate in which former US President Donald Trump attacked Vice President Kamala Harris over the rise in prices that began a few months after the Biden-Harris administration took office, when global supply chains were disrupted and caused a severe shortage of parts and Labor.

Technical forecasts for the GBP/USD pair today:

The formation of the downward channel for the GBP/USD is still clear and strong, and breaking below 1.3000 could be an easy target for bears. Also, after which the next important support will be 1.2880, which is the beginning of the technical indicators moving towards strong oversold levels. Conversely, based on the daily chart performance, a return to the 1.3200 resistance will be important to predict the strength of the upward trend again. Technically, we still prefer selling GBP/USD from any upward level. Today, GBP/USD will be affected by the announcement of the rest of the US inflation figures, the Producer Price Index, as well as the weekly US unemployment claims.

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