GBP/USD pares daily gains near 1.3850 ahead of US Retail Sales data

• GBP/USD halts the previous session’s daily gains on Thursday.
• UK Inflation data makes BOE’s hawkish stance firmer.
• A downtick in US Treasury yields keeps US dollar gains in check.

GBP/USD treads water on Thursday in the early European trading hours. The pair pushed above the 1.3850 mark in the overnight session on higher-than-expected inflation data, which fueled the expectations of a sooner rate hike and stimulus tapering by the Bank of England (BOE).

At the time of writing, GBP/USD is trading at 1.3835, down 0.05% for the day.

As per the economic data, UK inflation came higher breaking the record of nine-year in August. The readings came at 3.2% in August as compared to 2% in July and above the market expectations of 2.9%. 

In the latest development, UK Prime Minister Boris Johnson did shuffling to his cabinet. Liz Truss will be given Foreign Secretary, and Dominic Raab will become Justice Secretary. Robert Buckland, Robert Jenrick and Gavin Williams will leave the Cabinet office.

The sterling remained under pressure as Brexit concerns refused to subside, as per the latest report the UK had postponed the introduction of post-Brexit checks on imports to England, Scotland, Wales citing COVID-19 and global supply chain disruptions.

On the other hand, the US Dollar Index (DXY), which tracks the greenback performance against the basket of currencies, turns mildly lower below 92.50  head of the US Retail Sales data, which is helping GBP/USD find footing in the European session.

GBP/USD additional levels