The greenback continues its ascent on Tuesday, with the major currencies are on the defensive ahead of this week’s G 20 Summit in Argentina. The pound is broadly lower as Brexit deal hopes continue to fade. GBPUSD slipped to mid-November lows around 1.2733, which helps to lift the buck.
Interestingly, the EURUSD pair is also edging lower even as the Italian government has signaled that the country could adjust the deficit target from 2.4% to 2.2%. The price is threatening the 1.13 figure as traders ignore the potentially positive developments in the Italy’s drama. Such a behavior shows that investors are focused on the general dollar tone in the context of risk sentiment. In other words, traders prefer to buy USD ahead of the crucial Summit in Argentina, where trade and oil prices will likely be in focus.
Another potential source of further dollar strength are the upcoming comments by the Fed officials. Investors now doubt that the Federal Reserve will continue its tightening path in accordance with previously announced plans. So fresh statements could dispel those doubts if the politicians confirm the outlined plan. In this regard, the greenback could strengthen further. So, EURUSD may lose the 1.13 handle, while the pound could challenge the 1.27 support for the first time since late-October.