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GBP/USD faced rejection near the 1.4000 mark and trimmed a part of its intraday gains. An optimistic UK economic outlook extended some support and helped limit the downside. An upward revision of the UK Manufacturing PMI for February, which was finalized at 55.1 as against 54.9 estimated, extended some support to the GBP/USD pair. EUR/USD continues its march south after being rejected from recent peaks in the 1.2240 region. The underlying bullish sentiment in the euro remains under pressure for the time being amidst investors’ adjustment to potential US inflation and the subsequent increase in yields and the demand for the dollar. The dollar index was down 0.1% at 90.752. USD/JPY was largely flat at 106.56, near the six-month high of 106.69 touched Friday despite Japan's factory activity expanding at the fastest pace in over two years in February. AUD/USD rose 0.8% to 0.7770, following a 2.1% plunge on Friday, as the Reserve Bank of Australia said it would buy twice the normal volume of long-term bonds at this week's regular operation. The RBA's policy-making committee meets on Tuesday.  NZD/USD climbed 0.9% to 0.7290, recovering some of Friday's 1.9% slide, while USD/CAD fell 0.5% to 1.2680.

GBP/USD remained under some selling pressure for the second straight session on Friday. The intraday downtrend managed to find some support near the 1.3900 confluence level. Mixed technical indicators warrant some caution before placing aggressive directional bets. EUR/USD comes under pressure and returns to 1.2130.The dollar bounces off lows on the back of higher yields.US PCE takes centre stage later in the NA session. EUR/USD reverses two consecutive daily builds, including fresh multi-week highs around 1.2240 recorded on Thursday, and returns to the 1.2150 region on Friday. The sharp and sudden pick up in yields of the US 10-year benchmark prompted investors to favour the greenback vs. extending the rally in the risk complex, at least in the very near-term. Dollar Index was up 0.4% at 90.468, also higher for the week and only 0.2% lower this month.

GBP/USD has bounced off the lows as Powell's dovish message weighs on the dollar. An attack on 1.42 looks imminent, Markets seemed to have been waiting for a further reassuring from Jerome Powell, Chairman of the Federal Reserve, before making another convincing move higher. The upbeat mood is adverse for the dollar, despite higher bond yields. The British pound remained well supported by the impressive speed of the coronavirus immunization campaign and the UK government's plan to ease the current lockdown measures. In fact, UK Prime Minister Boris Johnson has already unveiled a new four-step plan to end restrictions by 21 June. The Relative Strength Index on the 4-hour chart has dropped below 70, exiting overbought conditions and opening the door to further gains. Momentum remains to the upside and the cable continues trading above the 50, 100 and 200 Simple Moving Averages. EUR/USD clears the 1.2200 hurdle and advances to multi-week highs on the back of the now increasing selling pressure surrounding the greenback. The dollar index fell to its lowest since early January on Thursday and dropped to three-year lows against the Australian and Canadian dollars, after dovish signals from the U.S. Federal Reserve boosted the reflation trade in currency markets.

GBP/USD consolidates the spike to 1.4234. However, the cautious tone seen around the major could be mainly attributed to the overbought conditions on the Relative Strength Index (RSI), given the daily timeframe. The bulls are now contemplating the next move, with the 1.4300 level still on sight. Although a correction could be in the offing before the cable takes a flight once again northwards. To the downside, the bears have to beat the daily lows of 1.4106, in order to extend the corrective downside. EUR/USD has been lagging behind its peers, partially due to prospects of extended lockdown measures in Germany and AstraZeneca's announcement of yet another cut in AstraZeneca's delivery of vaccines to the old continent. The firm slashed by half its provisions for the second quarter, from 180 to 90 million doses. The dollar index edged down 0.10% to 90.032, sliding to a three-year low against the GBP and recording losses against commodities currencies, as increased bets that the global economic recovery from COVID-19 will whet investors’ risk appetite. The USD/JPY pair edged up 0.15% to 105.39. The AUD/USD pair was up 0.35% to 0.7937. The AUD, a usual beneficiary of rising metal and energy prices, climbed to near a three-year high. The NZD/USD pair was up 0.40% to 0.7369. The USD/CNY pair inched down 0.09% to 6.4585. The NZD was the focus of attention as the Asian session opened. The Reserve Bank of New Zealand (RBNZ) said that it would keep its interest rate unchanged at 0.25% earlier in the day, in line with expectations.

Having tested the 1.4100 level in the last hour, GBP/USD is consolidating the latest leg higher around 1.4080, up 0.11% on the day. EUR/USD is gaining 0.09% at 1.2164 and a breakout of 1.2179 (weekly high Feb.23) would target 1.2189 (weekly high Jan.22) en route to 1.2349 (2021 high Jan.6). On the downside, the next support at 1.2023 (weekly low Feb.17) followed by 1.2004 (100-day SMA) and finally 1.1952 (2021 low Feb.5). The dollar index was up 0.01% at 90.002. EUR/USD rose 0.2% to 1.2174, USD/JPY was up 0.1% at 105.14, while the risk-sensitive AUD/USD rose 0.1% to 0.7917, climbing to the highest level in almost three years as commodity prices have soared. These gains have triggered worries of a global rise in inflation, and puts the focus on Fed chief Jerome Powell, who testifies before Congress later in the day. He is expected to provide assurance that the Fed will not respond to higher inflation with an immediate rate hike, which could potentially cause the dollar to drop further. The Fed finds the right words on these occasions – most certainly downplaying the forthcoming rise in inflation into 2Q – such that the bond market decline can probably stay orderly.

GBP/USD is back on the bids in the European session, once again approaching the 1.4050 level to retest the 35-month highs. Boris Johnson’s office announced that the four conditions to ease the covid-induced lockdown are met and therefore, the government can proceed with the first step of reopening the economy from March 8. Meanwhile, PM Johnson said that “we will be setting out a roadmap to bring us out of lockdown cautiously,” with the main priority of re-opening the schools. The upper line of an ascending trend channel from September 10, 2020, currently around 1.4035, guards short-term GBP/USD upside. EUR/USD meets selling pressure and drops below 1.2100. German IFO Business Climate improved further in February. ECB’s Christine Lagarde will speak later in the session. U.S. dollar index was up 0.28% at 90.543. The yen lost 0.33% at 105.78 while the Aussie rose as much as 0.5% to an almost three-year high of $0.7908 before letting the dollar come back to 0.7864. The kiwi hit $0.7338, also its best since early 2018, helped by S&P's upgrade of New Zealand's sovereign credit ratings by a notch, but also saw the greenback gradually pare most losses.

UK Manufacturing PMI beats estimates with 54.9 in Feb. Services PMI in the UK jumps to 49.7 in Feb, a big beat. GBP/USD sees fresh demand and renews multi-month tops above 1.40. EUR/USD clinches fresh tops in the 1.2140 region. Flash German, EMU Manufacturing PMI surprised to the upside. Flash PMIs, housing data, Fed speak next on tap in the NA session. The Dollar Index was down 0.1% at 90.483, after a 0.4% decline overnight cut short a two-day winning streak. USD/JPY was down 0.1% at 105.62, while the risk-sensitive AUD/USD rose 0.4% to 0.7793. The dollar had posted gains over the last couple of days as U.S. Treasury yields had risen with the release of strong retail sales data, but the unexpected rise in the number of jobless claims came as a reminder of how much slack the pandemic has left in the labour market.  A total of 861,000 claims were filed during the previous week, hitting a four-week high, compared with the 765,000 claims expected and the 848,000 claims filed during the previous week. The Federal Reserve had already warned, in the minutes from its January policy meeting, that the labour market would take time to return to trend and thus its easy monetary policy would stay in place for a considerable period. And Treasury Secretary Janet Yellen made it clear that $1.9 trillion in pandemic-relief spending is still needed, defending the need for President Joe Biden’s plan despite the recent strength in retail sales.

GBP/USD caught some aggressive bids during the early European session. The momentum pushed the pair back above the 1.3900 round-figure mark. President Joe Biden may struggle to pass his proposed $1.9 trillion covid relief program and that means less debt issuance. In turn, Treasury yields may drop off their highs, and make the dollar less attractive. The Federal Reserve's sanguine approach to inflation may take some of the air out of the rally. The single currency regains the smile following recent losses and motivates EUR/USD to reclaim the 1.2070 region on Thursday. The corrective downside in the greenback follows a drop from recent yearly highs of yields of the US 10-year reference, which managed to climb to as high as the 1.33% zone on Wednesday and drop to the current 1.28% neighbourhood afterwards. The dollar index was down 0.1% at 90.903.  USD/JPY was down 0.1% at 105.81, while the risk-sensitive AUD/USD rose 0.1% to 0.7758. The Federal Reserve released the minutes from its January policy meeting on Wednesday, and these reinforced its plans to let the economy overheat while maintaining an ultra-accommodative monetary policy.

Cable witnessed some selling during the first half of the trading action on Wednesday and retreated further 34-month tops, around mid-1.3900s touched in the previous session. The downtick was sponsored by some follow-through US dollar buying interest, which remained well supported by the recent runaway rally in the US Treasury bond yields. The market has been pricing in the prospects for the passage of the US President Joe Biden's proposed $1.9 trillion stimulus package. The reflation trade, in turn, pushed the yield on the benchmark 10-year US government bond to the highest level since February 2020, around 1.30% and was seen as a key factor that underpinned the greenback demand. That said, the downside remains limited amid optimism that the impressive pace of vaccinations in the UK would allow the UK Prime Minister Boris Johnson to lift COVID-19 restrictions and get the economy moving. EUR/USD remains under pressure below 1.2100 ahead of the European open, as the US dollar clings to the recent gains amid a rally in the US Treasury yields. The dollar index was up 0.3% at 90.757, bouncing from the three-week low of 90.117 hit on Tuesday. USD/JPY was flat at 106.06, after earlier hitting a five-month high, while the risk-sensitive AUD/USD fell 0.1% to 0.7746.

GBP/USD is standing out by advancing above 1.39 as the UK reported the lowest number of COVID-19 infections since October and the vaccination campaign continues at a rapid pace. The U.S. dollar was mired at a three-week low on Tuesday as growing optimism about the outlook of the global economy in the coming months sent investors scurrying to purchase riskier currencies including the euro, crown and the British pound. The euro shows little reaction to the upbeat Eurozone growth figures, as EUR/USD flirts with three-week highs of 1.2157. The spot is higher by 0.25% on the day. The dollar index steadied at 90.229, its lowest level since Jan. 27. It has fallen nearly 1.5% over the past eight trading sessions. The Chinese yuan slipped 0.1% to 6.4132 per dollar after the Financial Times reported Beijing was exploring curbs on rare earth mineral exports in order to hurt the U.S. firms that use them.