The pair retreats from May highs after US bond yields stabilize, though UK inflation data supports BoE rate hike bets.
The GBP/USD pair fell below 1.3600 in early Asian trading Thursday, retreating from its highest level since May 11. The move follows a rebound in the USD after US bond yields stabilized from a three-month low, driven by Treasury Department plans to increase longer-dated debt purchases starting September.
Wednesday’s hawkish FOMC minutes, showing support for further rate hikes, helped curb USD losses despite geopolitical tensions. Meanwhile, stronger-than-expected UK inflation data reinforced expectations for at least one Bank of England rate increase by year-end, limiting downside pressure on the pound.
US President Joe Biden’s announcement of stricter economic restrictions on Iran added to geopolitical uncertainty, though the fundamental outlook for GBP/USD remains tilted toward bulls.