British Pound Rebounds on Tuesday Amid Stronger British Bond Yields

Updated:

The British pound climbed higher in the London session on Tuesday, snapping a three-day fall following some short-covering by investors along with a rally to a seven-year high in the 10-year British government bond yields.

At press time, GBP has gained over 0.1% against the US Dollar, as the UK 10-year government bond yields rose by 1.96%, its highest level since December 2015.

However, the market outlook remains on a cautious tone, with Sterling a few points away from its November 2020 low of 1.2973, which got refreshed last week.

Commenting on its price action against the dollar, an economist at ING expects the GBP/USD pair to record more declines over the week, explaining:

“Cable is currently trading around 1.30: breaks below this level have proven to be very short-lived in previous instances (March-April), but we think that a supported dollar and the lack of major drivers for Sterling this week could support a more decisive depreciation in GBP/USD.”

Market Attention for Clues on British Pound Shifts to Bailey’s Thursday Speech

Despite the recent bullish yields recorded over the past few days, investors remain hesitant about placing aggressive bets behind the GBP, as the Bank of England (BoE) plans to go the way of its global counterparts and increase interest rates to tackle rising inflation. Recent data shows that British consumer price inflation jumped by 7% in March, its highest single-month increase in 30 years.

That said, market participants have slightly dampened expectations for how much the BoE could raise interest rates over the year. Market focus has turned to BoE Governor Andrew Bailey, who should deliver a speech on Thursday, even as hedge funds reportedly increase their short bets on the Sterling to the highest point since 2022.

Meanwhile, the pound also recorded a decent move against the euro today, climbing by 0.1% to 82.94.

 

You can purchase Lucky Block here. Buy LBlock

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.