- Pound among worst performers of the American session.
- GBP/USD marginally low for the day, but off lows.
The GBP/USD dropped back to test the 1.3860 area and it found support and rebounded toward 1.3900. Still remains in red for the day, but the negative momentum is easing as the US dollar weakens further across the board.
The pound remains among the worst performer in the markets on Thursday affected by the Bank of England meeting. The central bank, as expected, kept its monetary policy unchanged, and announced a slowdown in its weekly purchases that “should not be interpreted as a change in the stance of monetary policy”.
“While the MPC made efforts to downplay the policy implications, we do think the BoE is now part of a subset of major central banks taking a harder look at the policy exits. This divergence emergence may be a slow-burn story that plays out over H2, but it should help underpin sterling against counterparts backed by still-dovish central banks”, argued analysts at TD Securities. They see scope for a push above 1.40 in GBP/USD, “but the US employment report and UK local election results loom first.”
The DXY is trading at 90.90, down 0.35%, at the lowest level in three days. The 10-year yield stands at 1.559%, about to test the weekly that if broken could lead to an extension, weakening the greenback further.
Economic data from the US came in above expectations with initial jobless claims falling below 500K for the first time since the pandemic. The data helped the greenback, only momentarily. Fed’s Kaplan reiterated that he would like to start talking about tapering at the FOMC sooner rather than later.
Technical levels
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