The GBP/USD pair edges higher as a fresh trading week begins.
The US Dollar Index, which tracks the performance of the greenback against its six major rivals, trades near 94.20 following higher US T-bonds yields. The US benchmark Treasury yields soar 1.61%, with more than 1% gains.
The greenback lock-in gains despite downbeat NFP data released on Friday. The US economy added just 194K jobs in September. Nevertheless, The Fed seems unfazed by the numbers and looks affirmed to begin tapering as soon as November.
In addition to that, China’s latest offer to back tariffs and sanctions in a virtual meet between the US Trade Representative Katherine Tai and China’s Vice Premier Liu He raised the temperature in the region resulting in capital flows toward the greenback on its safe-haven appeal.
On the other hand, the British pound continues to swing in between hawkish BOE and the uncertainties arising from the Brexit saga. The Bank of England (BOE) Governor Andrew Bailey warned of a potentially “very damaging “, period of inflation unless policymakers take any action whereas Monetary Policy Committee (MPC) member Michael Saunders also supported the hawkish view.
Furthermore, Ireland’s Foreign Minister warned that the UK demand for the Northern Ireland Protocol could result in ” a breakdown in relations” with the European Union (EU). Meantime, China bans the import of UK beef from cattle under 30-month of age as a case of ‘mad-cow disease detected on a farm in Britain.
As for now, traders keep their focus on the UK BRC Like-For-Like Retail Sales amid a light economic calendar, to gauge the market sentiment.
GBP/USD Long (Buy)
Enter at: 1.3680