GBP/USD holds steady below 1.4100 mark amid USD strength
- GBP/USD maintains a bearish tone in the early European session.
- A modest rebound in the US dollar keeps the advance limited for the pair.
- New COVID-19 variant might disrupt the UK's plans for easing restrictions.
A mild bid tone around the US dollar keeps GBP/USD in a consolidation mode below 1.4100 in the early European session.
The pair refreshed the daily high’s near 1.4110, having touched the intraday low at 1.4078, now bouncing back to 1.4090.
The US dollar index (DXY), which tracks the greenback performance against its counterparts, rose to 90.38, with modest gains at 0.8%. The index lost ground on Friday post US Retail Sales data, which disappointed the market expectations of a1% rise. The sluggish data reaffirmed the Fed’s commitment to stick to its current monetary policy, owing to the uneven economic recovery. This, in turn, made the US dollar less attractive to investors.
Meanwhile, the escalated Middle East tensions offered some constructive bids for the greenback at the start of the new week, which kept the gains in the pair limited.
On the other hand, the UK Prime Minister Boris Johnson said on Friday that the new COVID-19 strain, the first detected in India, could pose a serious threat on stage four easing restrictions in June. He expressed his concerns over the speed of the transmission of the new variant. In addition to that, the time interval between the two-covid vaccine shots will now be decreased from the current 8 weeks to 12 weeks.
Lately, the cable also benefited from some Brexit optimism after UK-Ireland agreed to work smoothly together on post-Brexit trade.
As for now, traders turn their attention to the Fed and Bank of England official’s upcoming speeches in the economic docket.
GBP/USD Additional Levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
