- After selling off over recent sessions, the Pound is steading versus the greenback and could move higher.
- GBP’s move lower along with the USD rally appears increasingly like a short-term corrective move
GBP/USD & OTHER PAIRS STABILISE
GBP/USD and other European currencies are stabilising in the European trading session indicating that the decline across recent sessions could be a healthy short-term corrective move within the ongoing uptrend which has been in place since September 23 last year.
The decline and recovery of GBP/USD has been accompanied by similar moves in other currency pairs such as AUD/USD, NZD/USD and USD/CAD.
On the one hand, political chaos in Washington and rising coronavirus infections could drag on the pair, whilst this can be countered with vaccine rollout developments and the expectation of more US fiscal stimulus.
Recently Fed officials have suggested that the US Federal Reserve could soon start tapering its bond buying program later this year: A boost for US treasury yields, the US Dollar whilst a drag for GBP/USD.
That said flows out of Treasuries could have already run its course. Attention will now turn to more Fed officials due to speak.