GBP/USD remains on the defensive below 1.3800 amid USD strength
- GBP/USD records third straight day fall on Wednesday.
- US Dollar Index remains strong above 92.50 despite a downtick in the Treasury yields.
- Tax hike and Brexit concerns weighed on the prospects of the sterling.
The GBP/USD pair finds no respite on Wednesday and continues to extend losses from the previous session. The pair started the week on a weaker note, falling from the highs of 1.3874.
At the time of writing, GBP/USD is trading at 1.3781, down 0.03% for the day.
The US Dollar Index (DXY), which tracks the greenback performance against its six major rivals, gets support from the US 10-year benchmark Treasury yields, which rose to 1.38% on Tuesday.
Investors remained pessimistic about the rising coronavirus cases and their impact on the economic recovery. As per Reuters, more than 20,800 people died from the COVID-19 in the past two weeks. US President Joe Biden will announce a plan to tackle the situation on Thursday.
Meanwhile, CNN reported that House Republicans could face pressure to vote against the bipartisan infrastructure bill when they returned to Washington later this month.
On the other hand, the sterling faces upside pressure from the stronger greenback. Furthermore, the announcement of the new tax hike by the UK government weighed on the pound. Economists warned that the move could hamper the economic recovery and relative performance of the British pound in the foreign exchange market.
Additionally, the European Union (EU) warned there will be no renegotiations as the UK once again postponed the implementation of border checks on goods traveling to Northern Ireland (NI).
As for now, investors turn their attention to US JOLTS job Openings for fresh trading impetus.
GBP/USD additional levels