GBP/USD jumps to multi-day high, eyes 1.2300 mark amid fresh USD selling By HareshMenghani GBPUSD BOE Fed RiskAversion Currencies
Softer US macro data weighed on the USD and prompted a short-covering move.GBP/USD pair
witnessed a short-covering bounce on Thursday and rallied nearly 150 pips from the 1.2040 area, or the daily low touched in the aftermath of the Bank of England policy decision. The momentum pushed spot prices to a three-day high, around the 1.2280-1.2285 region during the early North American session.positive move lost steam following the disappointing release of the US macro data, which, in turn, was seen as a key factor that offered support to the GBP/USD pair.
That said, elevated US Treasury bond yields, bolstered by hawkish Fed expectations, should help limit any deeper USD pullback. Fed Chairsaid on Wednesday the US central bank is “absolutely determined” to keep inflation expectations anchored to 2% and reaffirmed another big hike in July. Moreover, the so-called dot plot showed that the median year-end projection for the federal funds rate moved up to 3.4% from 1.9% in the March estimate and 3.8% in 2023.
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