GBP/USD retreats toward 1.3950 as USD rebounds

• GBP/USD pauses the previous session’s gain on Friday in the Asian session.
• US dollar rebounds toward 92.00 after hitting a one-month low.
• The sterling gains on the hope that the BOE could be less dovish further due to a steady decline in coronavirus infections.

After testing a one-month high in the overnight session, GBP/USD pares part of its gains in the Asian trading session on Friday. The pair seems to be exhaustive near the 1.4000 mark but remained elevated.

At the time of writing, GBP/USD is trading at 1.3955 down 0.04% for the day.

The US Dollar Index (DXY), which tracks the greenback performance against its six major rivals, trades below gains some traction in the Asian trading hour, after it hit a one month low in the previous session.

The downbeat US data and the dovish Fed took a toll on the USD valuation. The US Gross Domestic Product (GDP) increased at 6.5% in Q1, well below the market consensus of 8.5%.

US Fed Chair Jerome Powell said on Thursday that the job market still had “ some ground to cover before it would be time to talk about tapering.

On the other hand, the sterling gains ground after the reports surfaced that UK scaped quarantine status for fully vaccinated EU and US visitors.

Meantime, the EU pauses legal action against the UK over the Northern Ireland (NI) protocol.

As for now, investors await the US Personal Spending and Income data, and Personal Consumption Expenditure Index (PCE) to take fresh trading impetus.

GBP/USD additional levels