The Cable started the week under a bearish pressure after failing to recover 1.35 the previous week. US Dollar strength was complemented by rising US Treasury yields, pushed the pair lower below 1.33 to levels not seen since December 2020.
Financial markets were led by safe havens on Friday due to rising fears over a new variant of the Covid, which is oppressing global economic recovery. As a result, US Treasury yields fell nearly 8%, weakening the dollar.
A 15-basis points hike by the BOE was priced last in December with a 55% probability, up from a 75% likelihood on Thursday. British Health Minister Sajid Javid announced Friday that flights from six African countries will be banned from 12:00 GMT. Investors may wish to stay away from the British pound if the new Coronavirus variant affects interest rate forecasts.
The weekly forecast for the GBP/USD pair is slightly bullish as the price found some respite just below the 1.3300 handle. However, the rising Covid fears may cap the gains.
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