GBP/USD: Sterling succumbs to an overwhelming dollar strength

GBP/USD has been drifting lower amid a mixed market mood and after mixed UK jobs. The cable is back to where it was early in February and could see further falls if the break below 1.3775 is confirmed, according to FXStreet’s Analyst Yohay Elam.

See:  GBP/USD to plummet towards the 1.3610/00 zone on a break below 1.3800 – OCBC

Key quotes

“President Joe Biden’s advisors have been putting the final touches on an ambitious $3 trillion infrastructure program which means a hotter US economy. That is boosting the dollar.”

“Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell will appear before Congress and they are set to shed light on current conditions and expectations for the future. Republicans will likely quiz them on inflation prospects, especially with grand expenditure.”

“After the EU threatened to block exports of AstraZeneca doses made in the continent to Britain, London and Brussels are trying to find solutions that may assure the ongoing flow of jabs on both sides of the Channel. Any compromise from Johnson could slow the UK’s vaccination campaign, but after reaching 50% of the population, the risk seems low.”  

“The labor market is sending mixed signals. While the UK’s Unemployment Rate surprisingly dropped to 5% in January, jobless claims shot up by 86,500 in February. The more recent figures seem to have the upper hand – adding to sterling’s misery.”  

“Pound/dollar has slipped below 1.3775, which was the previous March low, and also provided support in mid-February. If the break below 1.3775 is confirmed, the next cushion is at 1.3745, which capped GBP/USD in early February. It is followed by 1.3580, a support line from the same period.”  

“Some resistance is at 1.3810, a support line from last week, followed by 1.3860.”