GBP/USD: Poised to extend gain beyond multi-month high above 1.4160

  • GBP/USD refreshes daily highs in the Asian session.
  • Risk-aversion underpins the demand for the US dollar.
  • Investors keep their eye on UK Claimant Count and US Housing data.

The GBP/USD pair is trading with a modest gain in the Asian session. The pair remains in a steady range following the previous two sessions, after testing the daily lows at 1.4000 on May 13.

At the time of writing, the GBP/USD pair is trading at 1.4153, up 0.14% on the day.
The strength in cable, owing to the optimism on the reopening of the economy amid faster vaccination ahead of its counterparts, keeps the GBP/USD pair constructive near the higher levels. Indoor dining, cinemas, schools, and universities were back to normal. The ban on international flight was also lifted under phase 3 of the economic reopening plan on Monday.

The economy is expected to show the effect of easing restrictions in the coming months. However, the UK PM Boris Jhonson remains concerned about the final unlocking phase scheduled for June 21 as the Indian corona variant takes hold in part of England.

Moving on, the UK Brexit Minister, David Frost expressed his concerns over regulation between Northern Ireland and the rest of the US as well as the firms’ finance issues with the EU. The Brexit chaos remains a pain area for the cable lately.

On the other hand, the subdued tone around the US dollar amid lack of buying interest pressurized the US dollar index (DXY) at 90.20 near the multi-month low. 

The disappointing retail sales data on Friday did not go over well with the market. Fed officials remain concerned over the uneven economic recovery and shrug off any inflationary pressure that aligned with the Fed’s commitment towards the ultra-easy monetary policy. 
As for now, investors turn their attention to the UK Claimant Count Change for April, Unemployment Rate, and Average earnings data . On US economic data, Building Permits and Housing Starts will be in focus to gauge the market sentiment.

GBP/USD Additional Levels

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