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GBP/USD rises above 1.3850 after disappointing US consumer confidence data

  • GBP/USD extends daily rebound during the American trading hours.
  • Consumer confidence in US weakened significantly in August.
  • US Dollar Index drops toward 92.50 after disappointing sentiment data.

Following a consolidation phase around 1.3800 during the European trading hours on Friday, the GBP/USD pair gained traction and extended its daily rebound in the American session. As of writing, the pair was up 0.35% on the day at 1.3851.

DXY pushes lower on dismal sentiment report

The renewed USD weakness on disappointing consumer confidence data from the US seems to be fueling GBP/USD’s upside.

The University of Michigan announced on Friday that the Consumer Sentiment Index declined to its lowest level since December 2011 at 70.2 in August. Additionally, the Consumers Current Conditions Index dropped to 77.9 from 84.5 in June. Reflecting the negative impact of this report on the greenback, the US Dollar Index is losing 0.45% at 92.56.

In the meantime, the benchmark 10-year US Treasury bond yield is down more than 3% on Friday, putting additional weight on the USD.

There won’t be any other data releases from the US in the remainder of the day and the pair remains on track to close the week in the negative territory despite the latest rebound.

Technical levels to watch for

 

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