pound-sterling-gbp-coin - GBP
  • GBP/USD slipped on US Dollar strength
  • Rising US bond yields, COVID-19 jitters buoyed the safe-haven greenback.
  • Break below  1.3430-25 support could see a deeper sell off.

The GBP/USD lost ground in the early European session trading near daily lows at 1.35.

The pair continues to fall away from last week’s 33 month high of 1.37, extending the selloff for a 4th straight session, sparked by sustained US dollar buying amid a surge in the US Treasury bond yields.

Investors are pricing in the more aggressive fiscal spending in 2021 after the  Democratic sweep in the US Senate runoff elections in Georgia. Higher government borrowing pushed the US bond yields to a 10 month high lifted the USD from multi-year lows.

Concerns over surging covid cases and tighter lockdown restrictions underpinned the safe haven greenback with the deteriorating risk sentiment also reflected in softer equity markets.

The pair declined to 1.3480 a two-week low and is vulnerable to slide further. GBP/USD could head towards 1.3430-25 support. A break through here could see another leg lower.

There is no high impacting economic data due for release on Monday so the US bond yields could continue to drive the USD. Covid developments could also produce trading opportunities for the GBP/USD pair.