This shift in strength ended the British pound’s six-day winning streak against the USD. The strong indicators also led to an increase in US 10-year yields by 6.7% to 4.66%. This surge wiped out the gains that the cable (GBP/USD exchange rate) had seen earlier in the week on Tuesday and Wednesday.
The anticipation of rate cuts had initially led to a weakening of the US dollar. However, the release of strong Q4 CPI data triggered a reversal in this trend, demonstrating the sensitivity of currency markets to macroeconomic indicators. The rise in US 10-year yields further underscores this point, highlighting the interconnectedness of global financial markets.
While the pound had been performing well against the USD for nearly a week, this run was halted by the robust performance of the US dollar. This serves as a reminder of the volatility inherent in currency exchange rates and their susceptibility to shifts in economic indicators and market sentiment.
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