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GBP/USD slides as USD steadies after bond-yield dip

The dollar held firmer after US bond yields slid to a three-month low, following the Treasury’s plan to at least double longer-dated government debt purchases starting in September.

Reported · Written up by our desk · Major Pairs

GBP/USD edged lower in Thursday’s Asian session, slipping back further from the prior day’s high since May 11, according to FXStreet. Spot prices dipped below 1.3600, even as the broader setup remained tilted toward dip buying.

FXStreet attributed the move largely to a steadier US dollar after yields fell sharply the day before, dragging the USD toward a three-month low. That yield slump followed the US Treasury Department stepping in to provide relief to bond markets, saying it would at least double purchases of longer-dated government debt starting in September, while hawkish FOMC Minutes helped limit additional USD losses.

On the US side, geopolitical risk also weighed on the outlook. FXStreet pointed to ongoing uncertainty tied to the US-Iran standoff over the Strait of Hormuz and said the Trump administration plans to impose stricter economic restrictions on Iran.

For sterling, FXStreet cited support from hot UK consumer inflation data released Wednesday, which reinforced expectations for at least one quarter-point rate hike by the Bank of England before year-end. The next catalysts for FXStreet’s view include the Philly Fed Manufacturing Index, weekly initial jobless claims, and speeches from influential FOMC members, which are expected to drive the USD and move GBP/USD.

Latest closeGBP/USD 1.354 ▲0.3%

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