- GBP/USD pauses the upside momentum in the early European trading hours.
- Higher US T-yields underpin the demand for the US dollar.
- Sterling holds ground amid mixed economic data, Brexit optimism, and hawkish BOE.
The GBP/USD pair remains muted on Thursday. The pair consolidates gains after testing the intraday’s high near 1.3672. At the time of writing, GBP/USD is trading at 1.3664, up 0.03% for the day.
The spot recorded nearly 90-pips movement in the previous session on a broad-based USD selling. The greenback retreated from its yearly highs around 94.50 post-US Consumer Price Index (CPI) readings, which came in higher at 5.4% in September, beating expectations. Furthermore, investors geared up for the Fed’s tapering as soon as November, according to the minutes of the September FOMC meetings.
At the moment, the US benchmark 10-year Treasury bond yields rebound near 1.55%, helping the greenback to hold 94.00 amid risk-on mood. It is worth noting that S&P 500 Futures is trading at 4,370, up 0.34% for the day.
On the other hand, the British pound gains were limited after the data showed that the UK’s economy grew 0.4% in August amid expectations the Bank of England (BOE) will be hiking interest rates as soon as December.
In addition to that, the UK’s Brexit Minister David Frost kept a softer stance at the European Union’s (EU) proposal to fix post-Brexit disruption in Northern Ireland, as the two sides prepared for fresh negotiations.
As for now, traders keep their focus on the Bank of England (BOE) Credit Condition Survey and the US Initial Jobless Claims to gauge market sentiment.
GBP/USD technical levels
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