Equity markets declined in the Asian session as climbing US yields dragged weighed on global risk assets.
The possible tightening of covid restrictions could undermine the British Pound in the near term.
GBP/USD moves below 8-EMA could see further losses.
GBP/JPY could decline after failing to breach key resistance.
Asian session roundup
Stock market lost ground in the Asian session as investors digested the impact of the spike in US Treasury yields on risk assets. Australia’s ASX 200 index declined just shy of 1% despite stronger than forecast retail sales figures.
In FX markets, the safe haven USD and JPY largely outperformed. Risk sensitive currencies such as AUD, NZD and NOK slid lower.
Tighter Covid Restrictions to Undermine GBP
The British Pound could come under pressure as UK lawmakers weigh up tightening covid in an attempt to control surging covid infections.
The latest viral R rate climbing to is thought to be 1.4 across the UK. An R rate above 1.0 implies that the virus will continue to spread exponentially.
These concerning developments have resulted in ministers questioning whether residents are adhering to the latest curbs.
The UK Health Secretary Matt Hancock refused to rule out harsher restrictions which has unnerved Pound traders, denting demand for Sterling against its major counterparts.