- GBP/USD gains ground as the Dollar weakens on speculation of a Fed rate cut in June.
- Rising US Treasury yields could have provided support for the US Dollar.
- Last Friday, Fitch Ratings revised the UK's sovereign credit outlook from negative to stable and confirmed its sovereign rating at AA-.
The pair GBP/USD halts a two-day losing streak, recovering recent losses and trading just above the 1.2600 level during the early hours of Monday's European session. The fall of the US Dollar (USD) seems to be the catalyst for the GBP/USD pair.
Moderate sentiment around the Federal Reserve's stance on the path of interest rates, with market sentiment inclined toward Fed to start interest rate cuts starting in Juneis weakening the US dollar.
The US Dollar Index DXY falls to near 104.30, while the 2-year and 10-year US Treasury yields remain at 4.60% and 4.21%, respectively, at the time of writing. The US Dollar (USD) fails to take advantage of the rally in US Treasury yields.
Fitch Ratings revised the UK sovereign credit outlook to stable from negative last Friday, affirming its sovereign credit rating at AA-. The revision came after the country's economy returned to growth in January following a shallow recession in the second half of 2023, driven by a resurgence in retail and housing sales.
UK retail sales beat expectations and remained stable in February. This figure beat the market consensus of a 0.3% decline and suggested a positive sign for the economy. Market participants are likely to closely monitor the release of fourth-quarter 2023 Gross Domestic Product (GDP) data from the United Kingdom and the United States on Thursday.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
