Pound Tumbles After BoE Keep Rates Steady Amid Rising US Treasury Yields

The Sterling pound fell against the dollar following the Bank of England’s dovish interest rate decision despite a unanimous vote to maintain the current rates. The GBP/USD currency pair’s decline was also fueled by the rising US Treasury yields, which boosted the dollar at the pound’s expense. The pair later recouped some losses.
The GBP/USD currency pair fell from a high of 1.4001 in the early London market to a low of 1.3897 in the early American market but had recouped some of its losses at the time of writing.
The currency pair initially traded sideways, alternating between gains and losses amid rising US Treasury yields. The pound could not maintain yesterday’s rally against the dollar after yesterday’s dovish FOMC rate decision pushed the next rate hike to 2024. The pair fell after the Bank of England released its monetary policy statement. The bank’s Monetary Policy Committee voted unanimously to keep interest rates at 0.1% and the asset purchase facility at £895 billion. The BoE Chief Economist Andy Haldane said that he expects the UK to have a rapid economic recovery, yet this had a muted impact on the pair.
The release of the disappointing US weekly initial jobless claims report by the Department of Labor allowed the cable to recoup some of its losses. News of the record number of COVID-19 vaccines administered in the UK on Wednesday also boosted the cable.
The currency pair’s future performance is likely to be affected by tomorrow’s UK public sector borrowing report and US dollar dynamics.
The GBP/USD currency pair was trading at 1.3934 at 18:22 GMT, having fallen from a high of 1.4001. The GBP/JPY currency pair was trading at 151.86 after dropping from a high of 152.55.
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Original from: www.earnforex.com