GBP/USD bulls await a sustained move beyond 1.3700 mark
|- GBP/USD added to the previous day’s strong gains and edged higher for the second straight day.
- The GBP remained supported after BoE Governor Bailey downplayed negative rate speculations.
- Retreating US bond yields, bullish sentiment undermined the greenback and remained supportive.
The GBP/USD pair held on to its modest intraday gains through the first half of the European session, with bulls still awaiting a sustained move beyond the 1.3700 mark.
The pair gained some follow-through traction for the second consecutive session on Wednesday and added to the overnight strong positive move, led by the Bank of England Governor Andrew Bailey's remarks. During his online speech to the Scottish Chambers of Commerce, Bailey downplayed speculations on negative interest rates and provided a strong lift to the British pound.
Bailey said that there are a lot of issues with negative interest rates and that it was too soon to reach any conclusion about the need for future stimulus. Bailey's comments indicated that the BoE is more likely to wait and see how the economy reacts to Brexit and the third lockdown in the UK before deciding on anything.
On the other hand, the ongoing retracement in the US Treasury bond yields kept the US dollar bulls on the defensive and remained supportive of the bid tone surrounding the GBP/USD pair. The recent strong rally in the US bond yields lost some steam in reaction to the strong demand seen at a $38 billion 10-year auction overnight.
Adding to this, the Fed officials reiterated that the monetary policy is going to remain accommodative. The greenback was further pressured by the underlying bullish sentiment in the financial markets, which remained well supported by hopes for a strong global economic recovery in 2021 and additional US fiscal stimulus measures.
There isn't any major market-moving economic data due for release from the UK on Wednesday. Meanwhile, the US economic docket highlights the release of consumer inflation figures. This, along with the US bond yields and the market risk sentiment, will influence the USD price dynamics and provide some impetus to the GBP/USD pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.