The bears remain in complete control, now pushing the GBP/USD pair to test two-month lows of 1.2829 en route 1.2800 levels.
GBP/USD ignores upbeat UK public finances data
The spot once again ran into offers just ahead of 1.29 handle, and from there dropped sharply towards 1.28 handle, as the US dollar buying across the board remains unabated amid rising Treasury yields and repositioning, with markets gearing up for the much-awaited Jackson Hole Symposium.
The greenback staged a solid comeback against its main competitors, reversing almost 50% of the 2-day declines, fuelled by renewed US political drama and fiscal issues combined with dwindling Fed rate hike bets this year.
Meanwhile, Cable found little impetus from the UK’s public sector net borrowing data, which showed that Britain unexpectedly posted its first budget surplus for any July since 2002. Also, better-than expected UK’s CBI industrial orders data failed to rescue the GBP bulls, leaving the rate meandering near two-month troughs.
Focus now shifts towards the sentiment on the Wall Street and developments in the Washington for fresh momentum on the prices.
GBP/USD levels to consider
“Should the decline accelerate through 1.2831, last week's low, the pair has scope to extend its decline down to 1.2790, en route to the 1.2750 region, with the decline having more to do with Pound's weakness than dollar's strength. To the upside, 1.2880 is the immediate resistance, followed by the 1.2920/30 region, where selling interest remains strong,” Valeria Bednarik, Chief Analyst at FXStreet explained.
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