- Risk off trading followed the US Presidential debate stocks lost ground riskier currencies such as GBP slipped, and safe havens flows into USD ticked higher
- GBP/USD shrugged off a slight upward revision to Q2 GDP & data revealing a surge in UK house prices.
GBP/USD under pressure amid risk off trading following the US Presidential debate. Safe havens, such as the US Dollar is being favoured over perceived riskier assets like stocks, AUD, EUR and GBP. The debate lacked substance. However, it did raise concerns over whether Trump would accept the result if he lost.
UK GDP COLLAPSE NOT AS BAD AS FIRST THOUGHT
UK data was a mixed bag. Q2 GDP was revised higher to -19.8% QoQ from -20.4% –a record decline. However, Bank of England Governor Andrew Bailey said on Tuesday that GDP was around 7-10% weaker in July and September than pre- pandemic and concluded Q3 expanded more strongly than in the period as a whole.
Bailey reiterated that he was not ruling out negative rates but was aware of the issues that negative rates could cause the banking system as a whole.
UK HOUSE PRICES JUMP
In sharp contrast the UK housing market remains solid. The Nationwide house price index +5% YoY in September, beating the 4.5% forecast and the previous month’s 3.7%.