- GBP/USD came under some heavy selling pressure after the BoE announced its policy decision.
- The lack of any hawkish turn disappointed investors and exerted pressure on the British pound.
- A subdued USD price action might help limit any further losses ahead of the key US macro data.
The GBP/USD pair witnessed some aggressive selling in the last hour and dropped to the 1.3900 neighbourhood, or fresh session lows after the Bank of England announced its policy decision.
As was widely expected, the BoE left its monetary policy settings unchanged at the end of June meeting on Thursday. In the accompanying statement, the central bank termed the rise in inflation as transitory and said that it did not want to undermine the recovery by premature tightening.
However, the lack of any hawkish tilt seemed to have disappointing market participants. This, along with concerns about the EU-UK stand-off on the Northern Ireland protocol and a jump in the Delta Plus covid cases in the UK, exerted some heavy downward pressure on the GBP/USD pair.
The downside remained cushioned, at least for the time being, on the back of a subdued US dollar price action, which has struggled to gain any traction amid mixed signals on the US inflation. That said, a modest uptick in the US Treasury bond yields acted as a tailwind for the greenback.
With the key event risk out of the way, market participants now look forward to a slew of important US macro data for a fresh trading impetus. The US economic docket highlights the release of the final Q1 GDP print, Durable Goods Orders, Initial Jobless Claims and Goods Trade Balance figures.
This, along with the US bond yields and a scheduled speech by New York Fed President John Williams, will influence the USD price dynamics and produce some trading opportunities around the GBP/USD pair.
