GBP/USD keeps the red below 1.1600 mark as USD sticks to gains on upbeat US GDP
- GBP/USD meets with a fresh supply on Thursday amid a goodish pickup in the USD demand.
- An intraday rally in the US bond yields turns out to be a key factor lending support to the buck.
- The mixed US macro data fails to impress the USD bulls or provide any impetus to the major.
The GBP/USD pair remains on the defensive through the early North American session and reacts little to the mixed US macro releases. The pair, however, manages to rebound a few pips from the daily low and is currently trading around the 1.1570-1.1575 region, still down nearly 0.50% for the day.
The US dollar makes a solid comeback and rebounds swiftly from over a one-month low touched earlier this Thursday, which, in turn, exerts some downward pressure on the GBP/USD pair. A goodish pickup in the US Treasury bond yields helps revive demand for the USD, which draws additional support from better-than-expected US GDP report.
The US Bureau of Economic Analysis reported that the world's largest economy grew by 2.6% annualized pace during the third quarter, beating estimates pointing to a reading of 2.4%. Adding to this, the US Weekly Jobless Claims rose from 214K to 217K during the week ended October 21, though was better than market expectations for 220K.
This, however, was offset by disappointing Durable Goods Orders, which rose 0.4% in September against the 0.6% growth anticipated. Excluding transportation, new orders declined by 0.5% as compared to a flat reading in the previous month and a modest 0.2% rise estimated. The data fails to impress the USD bulls or prompt fresh selling around the GBP/USD pair.
Apart from this, the optimism over the appointment of the new UK Prime Minister Rishi Sunak acts as a tailwind for the British pound. This, in turn, makes it prudent to wait for strong follow-through selling before confirming that the GBP/USD pair's recent rally to a multi-week high has run out of steam and positioning for any further losses.
Technical levels to watch