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GBP/USD rebounds towards 1.30 again as UK yields remain elevated

Yesterday the price action in the GBP/USD was rather tricky. The fall into and during the delivery of the UK budget was then replaced with a rise of around 100 pips after it, to 1.3043. That was all seemingly due to a rebound in UK bond (Gilt) yields to above 4.40% in the 10 year note at one stage. That clearly initially lifted the Pound as much as it seemed to dent the outlook for the FTSE 100 before and after the close. However, the GBP/USD was unable to sustain the move into the US close, when it ended that session at 1.2962. That 10 year yield has not materially backed-off much this morning, currently at around 4.36% and that seems to be helping the GBP/USD push off the lows seen earlier, at 1.2943. The pound is pressing back towards the 1.30 handle again just now. The prospect of the BOE lowering rates next week has clearly been dented after the UK budget and that could help support the Pound a bit more. That is by no means certain at this stage and of course much will depend on the path of the dollar over the next week, with the upcoming US election and any subsequent Fed reaction to that next Thursday. The GBP/USD is currently trading at 1.2990

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