GBP / USD appears to break two-day losing streak, holding onto gains around 1.4170

• GBP / USD saw a decisive rally after falling below 1.4100.
• The US Dollar Index remains on track to close little changed above 90.00.
• The focus shifts to the release of UK mid-level macroeconomic data.

After climbing towards 1.4200 thanks to aggressive comments from Bank of England (BOE) chief economist Andy Haldane on Wednesday, the pair lost its traction and closed in negative territory for the second day in a row. The lack of progress in the UK-EU talks on the Northern Ireland Protocol made it difficult for the GBP to maintain its strength.

Although the pair extended its decline and fell below 1.4100 on Thursday, it managed to make a decisive bounce and was last seen gaining 0.35% daily at 1.4170.

USD fails to capitalize on May inflation data

Hours earlier, data from the US showed that the consumer price index (CPI) in May rose to 5% annually from 4.2% in April. This reading exceeded the market expectation of 4.7% and allowed the dollar to gain strength at the beginning of the American session.

However, the improvement in market sentiment forced the USD to lose interest and gave GBP / USD a boost. Currently, the US Dollar Index is down 0.1% on the day to 90.04 and the S&P 500 Index appears to post its highest daily close above 4,240.

Meanwhile, the sharp decline seen in the EUR / GBP pair following the policy announcements from the European Central Bank appears to be helping the GBP retain its strength on Thursday.

On Friday, the UK Office for National Statistics (ONS) will release data for industrial production, manufacturing production and gross domestic product (GDP) for April.

Technical levels