Pound Falls Despite Upbeat UK GDP as US Treasury Yields Soar Lifting DXY

The Sterling pound fell against the resurgent dollar fueled by the surging US Treasury yields that boosted the greenback against most of its peers amid a risk-off environment. The GBP/USD currency pair fell despite the UK’s economic recovery in January, as tracked by the GDP rising above analysts expectations.
The GBP/USD currency pair fell from a high of 1.4004 in the Australian market to a low of 1.3907 in the mid-London session and was headed lower at the time of writing.
The currency pair’s initial decline was fueled by the negative investor risk appetite, which saw riskier currencies lose ground to safe-haven currencies. The release of the downbeat UK industrial and manufacturing production reports also contributed to the pair’s decline. According to the UK’s Office for National Statistics, the country’s manufacturing production fell 2.3% in January, which was higher than consensus estimates of a 0.8% decline. The pound kept falling despite the release of an upbeat UK GDP estimate for January, which came in at -2.9% versus the consensus estimate of -4.9%. The UK’s trade balance data for January also beat analysts expectations but had a muted impact on the pair.
As tracked by the US Dollar Index, which hit a high of 91.95, the dollar’s overall strength was the main driver behind’s the cable’s decline. The rising Treasury yields coupled with the drop in US futures premarket boosted the dollar at the pound’s expense.
The currency pair’s performance over the upcoming weekend is likely to be driven by geopolitical event and US dollar dynamics.
The GBP/USD currency pair was trading at 1.3890 at 12:05 GMT having fallen from a high of 1.4004. The GBP/JPY currency pair was trading at 151.40 after drpping from a high of 152.23.
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Original from: www.earnforex.com