- GBP/USD fails to capitalize on the previous session’s gains on Wednesday.
- The US Dollar Index trades strongly above 94.00.
- Energy crisis, slower growth and Brexit woes continue to weigh on the GBP.
The GBP/USD pair remains subdued in the Asian session, keeping its range below 1.3650. The pair opened higher and quickly retreated toward the session’s low near 1.3611 compromising nearly 10-pips movement.
The US Dollar Index (USD), which tracks the performance of the greenback against its six major rivals, trades near 94.00 following higher US T- bonds yields. The US benchmark Treasury yields soar 1.54% with more than 1% gains.
Investors remain invested in the greenback amid rising expectations of Fed’s tapering as soon as November and on the concerns of higher inflation. Traders also keep their eyes on Washington’s negotiations to raise the US debt ceiling in order to avoid the first-ever default by the government.
On the other hand, the British pound is struggling despite upbeat economic data. The IHS Markit/ CIPS UK Composite Purchasing Managers Index (PMI) came at 54.9 in September as compared to the market expectations of 54.1.
In addition to that, UK Prime Minister Boris Johnson said that the UK fuel crisis is now “abating”, even as it could take weeks for fuel supply to normalize. Furthermore, the UK hit back at France over its threat to Britain’s electricity supplies complying with its dispute over fishing, escalating post-Brexit tensions between the two countries.
As for now, traders keep their focus on the UK Construction PMI and the US ADP Employment Change to gauge the market sentiment.
GBP/USD technical levels
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