Sterling falls as Treasury yields climb.
Sterling falling as much as 0.8% versus dollar today – mostly due to the wide-scale dollar buying as U.S. Treasuries sold off during early London trading, pushing the yield on the benchmark note above 1.60%. Investors are looking to hedge inflation fears by buying U.S. dollars – which is leading to dollar gains against all other major currencies – and pressuring GBPUSD down. The other factor affecting dollar buying is the latest spike in the risk-off sentiment after multiple countries started to halt the vaccination by AstraZeneca’s COVID-19 vaccine (which is scaling back deliveries of vaccines) – adding to the bullish safe-haven inflows into the US dollar.
Expect sellers on upward corrections.
Next support to watch – 1.3778
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