GBP/USD extends gains to six-day highs at 1.3750
- Pound among top performers on Thursday after BoE.
- US dollar tumbles despite higher US yields.
- GBP/USD is having the best day in weeks.
The GBP/USD continued to rise during the American session and printed at 1.3749, the highest level since last Friday. The move higher was supported by a decline of the US dollar across the board.
The greenback weakened after the release of US economic data that came in below expectations and amid risk appetite. US stocks are rising sharply, with the Dow Jones up by 1.50% and the Nasdaq 0.90%. The sell-off in bonds is not helping the dollar (only versus the JPY). The 10-year US yield hit at 1.41%, the highest level since July 14.
The slide of the dollar added fuel to the GBP/USD rally. Previously the pair tested monthly lows near 1.3600 and then started to rebound, initially boosted by a stronger pound, that still remains among top performers on Thursday.
The Bank of England, as expected, left monetary policy unchanged. The BoE mentioned that conditions appear to have strengthened the case for a modest tightening. “A new twist was the possibility of hiking rates before completing the asset purchase programme. This would confuse the markets - both easing and tightening at the same time! We still see the first move in 3Q22”, mentioned analysts at Societe Generale.
The pound was supported by the BoE meeting and also by the sharp decline of EUR/GBP that dropped back under 0.8550.
Technical levels