GBP/USD eases back below 1.3800 amid US dollar strength
|- GBP/USD remains pressurized in the Asian session.
- US dollar Index stands at 10 weeks high at 92.33.
- GBP remains under pressure amid Brexit chaos and delayed economic reopening
GBP/USD continues to trade lower on Monday while trailing the previous seven session’s downside movement. The pair trades in a very narrow trade band before slipping below the 1.3800 mark.
At the time of writing, GBP/USD is trading at 1.3790, down 0.12% for the day.
The US treasury yields continue to retreat after investors digested the Fed hawkish inflation and interest rates outlook. The yield curve flattens as the short term bond yields are rising more than the benchmark 10-year bond yields. The short term bond yields are more sensitive to the rate changes.
The US Dollar Index (DXY) stands strong, however it experiences minor pullback following the fall in US treasury yields. The US dollar also gains as the risk sentiment deteriorates with falling equities and commodity prices.
It is worth noting that S&P 500 Futures were trading at 4,129, down 0.58%.
Market participants ditched sterling after the extended lockdown in the UK as the country failed to hold on to the existing plan of full economic reopening on June 21 due to rising corona cases.
Meanwhile, the UK Retail Sales fell unexpectedly in May. The headline inflation rate rose more than expected in May to the highest level since July 2019 and above the Bank of England (BOE) target of 2.0%.
Brexit could unleash havoc on the UK steel industry as warned by Tories. The cheap foreign imports in the name of a free trade agreement between the UK and EU under Brexit protocol could harm the domestic steel manufacturers. This, in turn, soured the sentiment surrounding the sterling.
In the absence of a strong macroeconomic catalyst, the dynamics around the US dollar continue to influence the pair’s performance in the near future.
GBP/USD additional levels
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.