- GBP/USD edged higher for the fourth consecutive session and shot to fresh three-year tops.
- Plans to ease lockdown in the UK and upbeat labour market report underpinned the sterling.
- A turnaround in the equity markets benefitted the safe-haven USD and capped the upside.
The GBP/USD pair traded with a mild positive bias through the mid-European session, with bulls still awaiting a sustained move beyond the 1.4100 round-figure mark.
The pair added to its recent strong gains and gained some positive traction for the fourth consecutive session on Tuesday, though lacked any strong follow-through buying. The sterling remained well supported by the UK government’s plan to ease lockdown measures and the impressive pace of COVID-19 vaccinations in Britain.
In fact, UK Prime Minister Boris Johnson unveiled a new four-step plan to end restrictions by 21 June and lifted hopes for a swift UK economic recovery. Adding to this, the latest UK jobs report showed that Claimant Count unexpected dropped by 20.0K in January and the previous month’s reading was also revised down to -20.4K.
The supporting factor, to some extent, was offset by a modest US dollar rebound from six-week lows. A turnaround in the global risk sentiment forced investors to take refuge in the safe-haven greenback, which, in turn, held bulls from placing aggressive bets and kept a lid on any further gains for the GBP/USD pair, at least for now.
Market participants now look forward to the US economic docket, highlighting the release of the Conference Board’s Consumer Confidence Index. The key focus, however, will be on Fed Chair Jerome Powell’s testimony before the Senate Banking Committee. This might influence the USD and provide some trading impetus to the GBP/USD pair.