GBP/USD Slips as 5.3% Treasury Yield Keeps Dollar Bid
GBP/USD weakened as a strong 10-year auction cooled the bond selloff, but the FOMC minutes kept another Fed hike firmly in the conversation.
GBP/USD traded lower on Wednesday as the U.S. Dollar remained supported by elevated Treasury yields and oil-driven inflation concerns. The $39 billion 10-year auction was notably strong, stopping at 5.30% with a 2.77 bid-to-cover and heavy indirect demand. That pulled the 10-year yield back from an intraday high near 5.36%, taking some heat out of the U.S. Dollar without reversing the broader rates story.
The FOMC minutes reinforced a Fed still focused on persistent inflation, while showing less agreement over how quickly additional tightening should follow September’s hike. October still looks like a likely pause, with December the more credible window for another move. Meanwhile, U.K. gilt yields remain extremely elevated, with the 10-year near 5.5% and the 30-year above 6%. That keeps BOE hike expectations alive, but the British Pound is struggling because the U.S. Dollar still owns the cleaner yield advantage.
GBP/USD Daily Price History
GBP/USD is sitting on the level that has repeatedly saved it this year. The 1.3160 area marked major lows in April and June, and price is back testing that same floor after the September breakdown. That makes this a very important support zone, but repeated tests are not necessarily bullish. Each retest chews through some of the demand sitting underneath it.
The broader structure is still bearish. GBP/USD is below the entire moving-average complex, the averages are rolling lower, and the August high near 1.3670 now looks like the top of the latest failed recovery. MACD remains below zero, although downside momentum is starting to flatten. Stochastics have turned higher from oversold territory, which says the pair is vulnerable to a short-term bounce even though the larger trend remains lower.
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