The US dollar trades unchanged at 91.95 following the gains in the US 10-year benchmark yields from the lower levels to trade at 1.47%. Investors digested Fed’s dovish outlook on interest rates amid higher inflation expectations. Meanwhile, Federal Reserve Bank of Richmond President Thomas Barkin said that the Fed has made “substantial further progress” towards its inflation targets to begin tapering. The US dollar gained traction following the comments.
On the other hand, the sterling was weighed down by the resurgence of Delta variant COVID-19 cases. Despite the threat of the highly contagious variant, UK Prime Minister Boris Johnson remained confident to lift coronavirus restrictions on July 19. In addition to that, the sentiments were further hit by the no-show from the Bank of England (BOE) in its July monetary policy meeting. The central bank warned against “ premature tightening” in policy and adopted a wait-and-watch approach.
Meanwhile, the positive vibes from the EU over the Brexit “sausage war” failed to provide much support to the cable.
As for now, investors await the UK Nationwide Housing Prices, Mortgage Approvals, and the BOE Consumer Credit for May. The US economic docket includes S&P/Case-Shiller Home Price Data.
GBP/USD Short (Sell)
Enter at: 1.3846