GBP/USD retreats from over one-week high, slides back closer to 1.2400 amid stronger USD – Crypto News – Crypto News
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GBP/USD rallies sharply, above 1.1860 on mixed US/UK PMIs GBP/USD rallies sharply, above 1.1860 on mixed US/UK PMIs

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GBP/USD retreats from over one-week high, slides back closer to 1.2400 amid stronger USD – Crypto News

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  • GBP/USD pulls back from over a one-week high amid the emergence of fresh USD buying.
  • A positive risk tone and reduced bets on more Fed rate hikes could cap gains for the buck.
  • Expectations that the BoE will raise rates further could underpin the GBP and limit losses.

The GBP/USD pair continues with its struggle to move back above the 50-day Simple Moving Average (SMA) and attracts some sellers near the 1.2450 area, or over a one-week high touched earlier this Thursday. The pair drops to a fresh daily low, around the 1.2415-1.2410 region during the early part of the European session and for now, seems to have snapped a four-day winning streak.

Following the overnight modest pullback from its highest level since mid-March, the US Dollar (USD) regains positive traction amid a good pickup in the US Treasury bond yields. This, in turn, is seen as a key factor exerting some downward pressure on the GBP/USD pair. That said, a combination of factors might hold back the USD bulls from placing aggressive bets, warranting caution before confirming that the pair’s recent bounce from the 1.2300 neighborhood, or its lowest level since early April, has run out of steam.

A duo of influential FOMC members on Wednesday showed a willingness to pause interest rate hikes this month. In fact, Federal Reserve (Fed) Governor Philip Jefferson said that pausing rate hikes at the next FOMC meeting would offer time to analyze more data before making a decision about the extent of additional tightening. Separately, Philadelphia fed President Patrick Harker favored pausing at the next meeting. Apart from this, a generally positive tone around the equity markets could cap the safe-haven Greenback.

The market sentiment gets a minor lift in reaction to the progress toward averting an unprecedented US debt default. In fact, the US House of Representatives voted in favor of a bill to suspend the debt ceiling late Wednesday and the deal now heads to the Senate for approval. Furthermore, a private survey showed that China’s manufacturing sector unexpectedly registered modest growth in May and boosted investors’ confidence. This, along with expectations that the Bank of England (BoE) could raise rates further, should lend support to the GBP/USD pair.

Market participants now look forward to the release of the final UK Manufacturing PMI for some impetus. Later during the early North American session, traders will take cues from the US economic docket – featuring the ADP report on private-sector employment, the usual Weekly Initial Jobless Claims and the ISM Manufacturing PMI. This, along with Fedspeaks, the US bond yields and the broader risk sentiment, will influence the USD demand and contribute to producing short-term trading opportunities around the GBP/USD pair.

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