- The pound retreats modestly against the US dollar which is still heading for the highest close in years.
- The US dollar regains some ground amid risk aversion.
The GBP/USD It is about to post the highest close since April 2018, trading around 1.3950. Earlier on Thursday, it rose to 1.3986, the new high for the cycle, and then retraced, finding support at 1.3925.
The correction from above came amid a widespread recovery in the US dollar. The dollar gained momentum as stock prices on Wall Street fell further into negative territory. The Dow Jones lost 0.90% and the Nasdaq 1.45%.
Economic data from the US was mixed and had no impact on the market. Traders continue to focus on the US bond market and Wall Street. Data to be released on Friday includes UK retail sales, US home sales and global PMIs.
Libra keeps shining
The pound remains among the best performers of the week. Expectations about vaccination in the UK remain a key driver for the currency. On Thursday, comments from Bank of England policy makers did not stop GBP / USD from rising further. Ramsden suggested there is room for more QE, and Sanders offered a not-so-positive outlook.
“The next decision of the Bank of England is on March 18. If the data disappoints in the first quarter, the bank may have to recognize more downside risks in the future and start talking more about expanding QE and less about tapering, ”wrote analysts at BBH.
Technical levels
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