- The USD finds some support amid recovering US bond yields and capped gains.
- No-deal Brexit fears/dovish BoE expectations hold investors from buying the GBP.
- Traders now eye the US PPI print for June and Fedspeak for short-term impetus.
The GBP/USD pair retreated around 30-pips from the early European session swing high and is currently placed at the lower end of its daily trading range, around the 1.2525-30 region.
Against the backdrop of Thursday’s hotter-than-expected US core CPI print, a follow-through pickup in the US Treasury bond yields helped limit the intraday US Dollar downtick on Friday and kept a lid on the pair’s attempted up-move to levels just above mid-1.2500s.
Meanwhile, speculations that the Bank of England might join other major central bank and ease monetary policy was further reinforced by the BoE’s external MPC member Gertjan Vlieghe, which coupled with persistent fears of a no-deal Brexit further collaborated towards capping gains.
The pullback, however, remained limited, at least for the time being as investors refrain from placing any aggressive bets amid UK political, economic and Brexit uncertainties – especially after the European Commission Chief nominee closed the door for renegotiating the withdrawal agreement.
Moving ahead, Friday’s US economic docket – featuring the release of PPI figures for June, coupled with comments by Chicago Fed President Charles Evans will now be looked upon for some short-term trading opportunities on the last day of the week.
Technical levels to watch