GBP/USD consolidates gains around 1.3950 amid firmer US dollar
- GBP/USD is trading in a relatively tight range for the past two sessions.
- US dollar index rebounds from multi-month lows above 90.60.
- Risk-aversion weighs upon the sterling.
The GBP/USD pair is moving in a tight trading range and is hovering in a 20-pips movement where the lows are kept near 1.3935 with the intraday high near 1.3960. The pair seems to be exhausted after witnessing a meaningful recovery from Wednesday’s low of 1.3862.
At the time of writing, GBP/USD is trading at 1.3948, up 0.05% on the day.
The pair lost its sheen in the New York session after the release of upbeat US Q1 GDP data, which stood at 6.4%, beating the market expectations of 6.1%. Initial Jobless Claims in April fell to 553k, slightly above the market expectations of 549k and Home Pending Sales, which rose to 23.3% in March on a yearly basis also supported the sentiment around the US dollar. The readings work as a catalyst for the revival of the USD demand, thus exerting pressure on the pair.
On the other hand, the cable is struggling with the domestic chaos related to Brexit. While it got a OK nod from the EU, still there are some issues lingering on, which pose a threat to the fate of the currency. Meanwhile, the Bank of England said on Saturday that it would likely slow down the bond purchase program as the economy rebounds. The optimism surrounds the cable after Goldman Sachs said that Britain's economy is expected to surpass the US economy in 2021. The bank has revised its growth target of 7.8% from 7.1% previously. It seems all the good news has been discounted by the market as the pair largely remain in a range.
Now the focus shifts to the US Personal Income and Spending data, Employment Cost Index, and PCE Price Index later in the day. As for now, the dynamics around the US dollar continue to influence the pair’s performance.
GBP/USD additional levels