GBP/USD struggles near daily low, around 1.2000 mark amid modest USD strength – by hareshmenghani GBPUSD Recession Fed Bonds Currencies
Recession fears weigh on investors’ sentiment and drive some haven flows towards the greenback.Thepair struggles to capitalize on the previous day's positive move and attracts fresh sellers near the 1.2075-1.2080 region on Thursday. The steady intraday descent drags spot prices to the 1.2000 psychological mark during the early part of the European session and is sponsored by the emergence of some buying around the US Dollar.
Despite the easing of strict COVID-19 restrictions in China, concerns about a deeper global economic downturn continue to weigh on investors' sentiment. This is evident from a fresh leg down in the US equity futures, which, in turn, is seen driving some haven flows towards the greenback and exerting downward pressure on the GBP/USD pair. That said, the prospects for smaller rate hikes by the Fed might hold back the USD bulls from placing aggressive bets and help limit losses for the major.
In fact, the minutes of the December FOMC policy meeting released on Wednesday showed that officials unanimously supported raising borrowing costs at a slower pace. The less hawkish outlook keeps the US Treasury bond yields depressed near a multi-week low, which could act as a headwind for the buck and lend some support to the GBP/USD pair.
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