GBP/USD remains poised to slide below 1.4100, US CPI eyed
- 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
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.
