GBP/USD edged higher on Thursday
The GBP/USD pair traded with a positive bias through the first half of the European session, with bulls making a fresh attempt to build on the momentum beyond the key 1.3500 psychological mark. The pair built on the previous day's hotter-than-expected UK CPI-inspired rally of around 100 pips from sub-1.3400 levels and gained some follow-through traction on Thursday. This marked the third successive day of a positive move – also the fourth in the previous five – and was supported by rising bets for an imminent interest rate hike by the Bank of England in December.
On the other hand, retreating US Treasury bond yields dragged the US dollar further away from a 16-month peak touched in the previous session. This was seen as another factor that acted as a tailwind for the GBP/USD pair. That said, the possibility of the UK government suspending a part of the Brexit settlement over Northern Ireland held back bulls from placing aggressive bets. Apart from this, the impasse over the post-Brexit fishing rights further collaborated to cap gains for the GBP/USD pair, at least for the time being. This further makes it prudent to wait for a sustained strength beyond the 1.3500 mark before traders start positioning for an extension of the recent recovery move from YTD lows, around mid-1.3300s touched last Friday.