GBP/USD steady around 1.3595, threatens to break above the 1.3600 figure

• The British pound seesaws around 1.3600 amid risk-off sentiment.
• Supply shortages and high energy prices dampen the market sentiment.
• The US Dollar Index reaches a one and ½ year high, around 94.50.

The GBP/USD is barely unchanged 0.01% during the New York session, trading at 1.3595 at the time of writing. A negative tone surrounds the market sentiment, with European stock indices losing between 0.13% and 0.56%, except for the IBEX 35, which is in the green, up 0.20%. Meanwhile, US indices seesaw between loses and gains, without clear direction, with the Dow Jones Industrial up 0.15%, while the S&P 500 and the Nasdaq are down 0.02% and 0.20%, respectively.

Supply shortages and the ongoing energy crisis across Europe and Asia are factors that keep investors sidelined. The “buy the dip” narrative has remained shut-in, thus hurting the market sentiment, as traders scramble towards safe-haven assets, like the greenback.

The US Dollar Index reached a one and a half year high at 94.52

Meanwhile, the US Dollar Index that measures the buck’s performance against a basket of six peers is barely up 0.04%, at 94.40, trimming earlier losses, that saw the index dip to 94.22, putting a lid on the GBP/USD pair.

In the UK economic docket, the Claimant Count Change  (MoM) for September rose to -51.1K better than the August reading at -58.6K. At the same time, the ILO Unemployment Rate dropped to 4.5%, versus a previous reading of 4.6%, in line with expectations. 

Across the pond, the US JOLTS Job Openings fell to 10.439M versus 10.925M expected.  The quit rate increased to a record 2.9% as more people left their jobs, underscoring how wage increases, sign-on incentives, and many job vacancies fuel the turnover.

The market reaction was muted, leaving the GBP/USD pair influenced mainly by market sentiment, the Federal Reserve bond taper announcement, and the possibility of the Bank of England hiking interest rates. 

KEY ADDITIONAL LEVELS TO WATCH