- GBP/USD treads water in the Asian session.
- US dollar remains steady and exerts pressure on the pair.
- Brexit concerns, Delta strain added to the British pound struggle.
The appreciative move in the US dollar keeps GBP/USD off guard on Thursday’s Asian trading hours. The pair remains reluctant to shed the previous day's weakness and continues to make minute moves with no meaningful tractions.
At the time of writing, GBP/USD trades at 1.4114, down 0.03% for the day.
The US Dollar Index (DXY) gathers momentum in the early Asian session, as investors await the highly anticipated US Consumer Price Index (CPI) data. The US Treasury yields ease to a fresh three months low of 1.48%.
Investors remain cautious about the Fed tapering measures if the data comes in at the higher end. The higher interest rates could trigger a sell-off in Treasuries, and thus higher yields, eventually bumping up USD valuations.
On the other hand, the combination of factors weighs on the sterling's performance. The growing tensions between UK and EU, as the two sides failed to reach an agreement on implementing the Northern Ireland Protocol, impact the sterling negatively. The British Prime Minister Boris Johnson is considering all options amid an emerging trade war after Brussels threatens to impose sanctions over the UK's exports to NI.
Meanwhile, US President Joe Biden, who is in the UK to attend the G-7 meeting, warned PM Johnson and directed to resolve the NI issue with the EU.
In addition to that, the rising coronavirus cases amid the newly found Indian “Delta strain” put the UK government's full economy opening plan in dismay.
As for now, investors are keeping a close watch on the US Core Consumer Price Index (CPI) report and Initial Jobless Claim to gain some fresh trading impetus.
GBP/USD additional levels
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.