GBP/USD has been attempting recovery after Wednesday’s dollar storm. According to FXStreet’s Analyst Yohay Elam, the cable has room to recover as the dollar storm has its limits.
“President Joe Biden may struggle to pass his proposed $1.9 trillion covid relief program and that means less debt issuance. In turn, Treasury yields may drop off their highs, and make the dollar less attractive.”
“The Federal Reserve’s sanguine approach to inflation may take some of the air out of the rally. The central bank sees any rise in prices as temporary and even blessed – contrary to current market concerns. If investors become fully convinced that rate hikes and tapering of bond-buys remain distant, that could also weigh on the currency.”
“UK COVID-19 statistics continue falling sharply, raising expectations for a rapid reopening of the economy. Pressures are mounting on Prime Minister Boris Johnson to enable the economy to pick up, also as Britain’s vaccination campaign is nearing a quarter of the population – the highest percentage in a large country.”