GBP/USD drops to 1.3750 amid renewed USD strength
|- GBP/USD came under bearish pressure in early American session.
- US Dollar Index turned positive on the day above 92.30.
- 10-year US T-bond yield is up 1% on a daily basis.
After fluctuating around 1.3800, the GBP/USD pair lost its traction in the early American session and touched a fresh six-day low of 1.3750. As of writing, the pair was down 0.52% on a daily basis at 1.3752.
USD starts to gather strength on the back of yields
In the absence of significant fundamental drivers, the USD's market valuation continues to drive GBP/USD's movements. Supported by a 1% increase in the benchmark 10-year US Treasury bond yield, the US Dollar Index started to edge higher and turned positive on the day above 92.30.
Earlier in the session, the data from the US showed that the goods and services trade deficit in February widened to $71.1 billion, compared to analysts' estimate of $70.5 billion, but this reading was largely ignored by market participants. On the other hand, the Markit Services PMI for the UK arrived at 56.3 and missed the market expectation and the flash estimate of 56.8.
Meanwhile, Chicago Federal Reserve Bank President Charles Evans reiterated that the Federal Reserve is expected to keep its monetary policy on hold for some time.
There won't be any other data releases from the US in the remainder of the day but the FOMC will publish the minutes of its March meeting and investors will look for fresh clues regarding a possible timing of a hawkish shift in the policy.
Technical levels to watch for
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