GBP/USD consolidates near 1.3750 ahead of US NFP data
- GBP/USD prints losses for the straight seventh day.
- US dollar stands strong after the mixed US economic data, NFP data eyed.
- The sterling lost its ground post-disappointing economic data, BOE dovish stance.
The strong buying interest in the US dollar continues to pressurize GBP/USD. The pair refreshed a new multi-month low on Friday in the initial Asian trading hours.
At the time of writing, GBP/USD is trading at 1.3760, down 0.05% for the day.
The US Dollar Index (DXY), which tracks the greenback performance against its six major rivals, trades above 92.50, with 0,13% gains. Investors analyzed a sooner than expected rate hike from the Fed in the near future.
The Upbeat economic data also enhances the USD valuations. The US Initial Jobless Claims fell to 364K, compared with market expectations at 390K. This is the lowest reading in the last 15-month.
The IHS Markit US Manufacturing Purchasing Managers Index (PMI) came at 62.1, marginally down by the market consensus at 62.6. The US Construction Spending declined 0.3% in May.
The ISM Manufacturing PMI dropped 60.6 in June from 61.2 in May, below the market estimated at 61. The readings pointed to a slowdown in new orders but still reflected the robust factory growth.
In addition to that, the International Monetary Fund (IMF) raised its 2021 US growth forecast sharply to 7.0% due to strong economic recovery and on the anticipation that US President Joe Biden ambitious infrastructure plan will be enticed. The US dollar jumped on the optimism.
On the other hand, the sterling came under renewed selling pressure following the dovish comments from the Bank of England’s (BOE) Governor Andrew Bailey. He shrugged off inflationary pressures as temporary due to shifts in base effects and supply-demand imbalances.
On the economic data front, The IHS Markit/CIPS UK Manufacturing PMI came at 63.9 in June, below the market expectations at 64.2.
Meantime, the EU and UK on Wednesday agreed to put the sausage war on hold for the next three months.
As for now, investors await the US Non Farm payroll data, Balance of Trade, and Unemployment Rate to gauge the market sentiment.
GBP/USD additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
