- GBP/USD consolidates in the Asian session.
- GBP forfeit gains amid delayed economic reopening, Brexit chaos
- Higher US Treasury yields lift demand for the US dollar.
The appreciative move in the US dollar keeps GBP/USD gains under check. The pair accumulated heavy losses on Wednesday comprising almost 145-pips movement.
At the time of writing, GBP/USD trades at 1.3995, up 0.5% for the day.
Investors rushed to the US dollar after the Fed strongly raised its projections for inflation in 2021. The Central bank’s hawkish view lifts the demand for the greenback.
The US 10-year benchmark yields stood at 1.58%, after rising as high as 1.59% from the lows of 1.48% on Wednesday following the Fed decision.
On the other hand, the British pound rose to 1.4132 after the upbeat inflation data. However, all gains evaporated towards the end of the previous session. The UK Consumer Price Inflation (CPI) jumped 2.1% in May, above the Bank of England’s (BOE) target of 2%.
Meanwhile, UK Prime Minister Boris Johnson on Monday announced a four week delay in the full economic reopening plan, amid concerns over a rising number of newly found ‘delta’ COVID-19 strain.
In addition, the Brexit saga continues to weigh on the performance of the cable. The escalating tension between the UK and EU over the Northern Ireland protocol remains a major pain area for the policymakers.
Market participants look forward to the US Initial Jobless Claims data to gain some fresh trading impetus.
