GBP/USD off 3-week lows, regains 1.2850 amid USD strength

• Attempts a tepid recovery amid positive European equities.
• Firmer US dollar index, Brexit jitters keep any upside attempts capped.
• All eyes on Carney and Powell for fresh trading impulse.

The GBP/USD pair reversed course and rapidly eroded nearly 50-pips to hit fresh three-week lows at 1.2833 before recovering some ground to regain the 1.2850 barrier.

GBP/USD: Focus on risk trends, USD dynamics

Last hour, the spot managed to find fresh bids following the comments from the UK House Of Commons Leader Leadsom, as she said that the UK Parliament will support PM Theresa May's deal provided backstop is not permanent.

The Cable’s recovery remains shallow, as the buying interest around the US dollar gathers steam in the European session amid firmer Treasury yields and advances on the US equity futures, as markets cheer the renewed optimism over the US-China trade deal heading into the fresh round of talks between the US and China scheduled later this week.

More so, the Brexit impasse on the Irish backstop, with the UK PM May trying her best to avoid a Hard Brexit scenario, continues to remain a drag on the pound. Looking ahead, the GBP markets will continue to track the USD dynamics and risk trends amid a lack of first-tier macro news and ahead of the speeches by the BOE Governor Carney and Fed Chair Powell due later in the NA session.

GBP/USD levels to watch