On Friday, intraday selling in the GBP/USD currency pair occurred, as the pair fell to new weekly lows.
The COVID-19 jitters worked as a headwind for the pound, causing it to fall.
In the face of weak USD demand, bulls showed some resiliency below the 1.3800 level.
Rebounding US bond yields could help to support the dollar and limit gains ahead of US data.
During the early European session, the GBP/USD pair fell below 1.3800, making new weekly lows, but swiftly recovered to the top end of its daily trading range.
On the penultimate trading day of the week, the pair saw some intraday selling, extending this week’s retracement decline from levels above the 1.3900 mark. Concerns about a new COVID-19 outbreak in the UK eclipsed overnight hawkish comments by Bank of England policymaker Michael Saunders. As a result, the British pound faced headwinds, putting pressure on the GBP/USD pair.
The US dollar, on the other hand, received some support from a sharp rise in US Treasury bond yields. Aside from that, the greenback was bolstered by anticipation that the Fed would tighten policy sooner than expected. Another aspect that led to the intraday drop was thought to be. The GBP/USD pair, on the other hand, showed some resiliency below 1.3800, recovering about 40 pips in the last hour.
In the absence of any substantial market-moving economic announcements from the UK, any subsequent rally could be viewed as a selling opportunity and could fizzle out fast. The announcement of monthly Retail Sales statistics is a highlight of the US economic calendar. This, together with US bond yields and broader market risk sentiment, might impact USD price dynamics and provide the GBP/USD pair a boost./n
