GBP/USD jumped to a fresh multi-week high amid the emergence of fresh USD selling.A positive intraday turnaround in the risk sentiment weighed on the safe-haven buck.
The GBP/USD pair attracted some dip-buying near the 1.1960 area on Monday and shot to a nearly three-week peak during the mid-European session. The pair was last seen trading around the 1.2065-1.2070 region, up over 0.50% for the day.
Friday’s better-than-expected flash UK PMI prints reaffirmed market bets for a 50 bps rate hike by the Bank of England in August and continued acting as a tailwind for the British pound. On the other hand, a positive turnaround in the global risk sentiment – as depicted by a strong intraday rally in the equity markets – weighed on the safe-haven US dollar. In fact, the USD Index languished near its lowest level since July 5 touched on Friday, which, in turn, was seen as another factor that provided a goodish lift to the GBP/USD pair.
That said, growing concerns about a global economic downturn could keep a lid on any optimistic move in the markets. Apart from this, a goodish rebound in the US Treasury bond yields could offer support to the safe-haven greenback. Investors also remain worried that the UK government’s controversial Northern Ireland Protocol Bill could trigger a trade war with the European Union amid the ongoing cost-of-living crisis. This could act as a headwind for sterling and further contribute to capping any meaningful upside for the GBP/USD pair.
In the meantime, the broader market risk sentiment and the US bond yields would drive the USD demand amid absent relevant market moving economic releases from the US on Monday. Hence, it remains to be seen if the GBP/USD pair is able to capitalize on the positive move or meets with a fresh supply at higher levels. Nevertheless, acceptance above the 1.2045 horizontal resistance could be seen as a trigger for intraday traders and might have already set the stage for a further near-term appreciating move.
EUR/USD rebounds towards 1.0250 amid renewed USD selling
EUR/USD is trading near 1.0250, recovering ground as the US dollar meets fresh supply amid a sudden positive shift in risk sentiment. Investors shrug off global economic slowdown worries and disappointing German IFO data.
EUR/USD News
GBP/USD recaptures 1.2000 as risk flows return
GBP/USD is advancing above 1.2000 amid the return of risk flows, which weigh negatively on the safe-haven US dollar. The UK political uncertainty and worries over recession persist amid expectations of a 50 bps BOE rate hike in August.
GBP/USD News
Gold jumps back above $1,730 despite firmer yields
Gold price is picking up fresh bids, regaining $1,730 amid fresh USD weakness. European equities turn positive, ignoring looming recession fears. The further upside in the bullion could be limited by the rebound in the US Treasury yields.
Free Forex Signals 