- GBP / USD gains some traction Thursday amid subdued USD price action.
- A combination of factors prevents bulls from opening aggressive positions and limits gains.
The pair GBP/USD has quickly recovered around 25-30 pips from the lows of the European session, although has struggled to capitalize on the move past the round 1.3600 level.
The risk appetite in the markets it has prevented investors from opening new bullish positions around the safe haven US dollar and acted as a tailwind for GBP / USD. The pound sterling has also been supported by signs of abatement of the fuel crisis in the United KingdomThough comments from Bank of England chief economist Huw Pill have limited earnings.
Pill has said that the current strength of inflation appears to last longer than originally anticipated and the BoE plans to relax the stock of asset purchases in the best possible way. However, interest rates are expected to remain at relatively low levels for the next several years, even as the impact of the COVID-19 pandemic recedes.
This occurs in the midst of Renewed tensions between Britain and France over post-Brexit fishing rights, which has helped limit any significant rise in the GBP / USD pair. In the latest evolution, French Finance Minister Bruno Le Maire said on Wednesday that France will define an action plan on the UK and fisheries on October 15.
On the other hand, Firm expectations that the Fed will begin reversing its massive pandemic-era stimulus as early as November and raising interest rates in 2022 they have helped limit any deeper losses around the USD. This, in turn, warrants some caution before positioning itself for any further bullish movement amid the absence of major UK economic data releases.
At the start of the American session, investors could take cues from the release of the usual weekly initial jobless claims data in the US This, along with broader market risk sentiment and US bond yields, it could influence USD price dynamics and provide some boost to GBP / USD ahead of the release of the NFP employment report on Friday.
GBP / USD technical levels
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