GBP/USD edges lower to near 1.2580 on improved US Dollar, UK PMI, FOMC minutes awaited

GBP/USD continues to lose ground as US Dollar snaps its losing streak.
Higher US Treasury yields support the Greenback to gain ground.
Traders await PMI data release from the United Kingdom on Thursday.

Akhtar Faruqui FXStreet

GBP/USD continues to remain in the negative territory, trading around 1.2580 during the Asian session on Tuesday. The strength of the US Dollar (USD) could be attributed to the improved US Treasury yields, which in turn, weighs on the GBP/USD pair. Traders are awaiting meeting minutes from the Federal Open Market Committee (FOMC) scheduled for Wednesday.

The US Dollar Index (DXY) edges higher as the market returns from a holiday-extended weekend, snapping its four-day losing streak. The DXY trades higher around 104.40 with 2-year and 10-year yields on US bond coupons standing at 4.65% and 4.30%, respectively, by the press time.

Moreover, ANZ expects that the Federal Reserve (Fed) will initiate rate cuts starting from July 2024. According to the CME FedWatch Tool, there is a 53% possibility of a 25 basis points rate cut by the US Fed in the June meeting. The recent remarks from the Fed officials considering the rate cuts sooner undermined the US Dollar.

San Francisco Federal Reserve President Mary C. Daly mentioned that three rate cuts are a reasonable baseline for 2024. Additionally, St. Louis Federal Reserve (Fed) president, James Bullard suggested Federal Reserve consider lowering interest rates at its March meeting.

The Bank of England (BoE) is expected to maintain interest rates at their current level to address persistent consumer prices in the United Kingdom (UK). Strong consumer spending adds complexity for policymakers at the Bank of England (BoE) as they navigate a technical recession and higher inflation amidst elevated interest rates.

Traders are likely to closely monitor the upcoming S&P Global/CIPS Purchasing Managers Index (PMI) data on Thursday to gain further insights into the UK's economic landscape. The Services PMI is anticipated to show a slight moderation in February but is expected to remain above the 50 mark, indicating expansion. Meanwhile, the Manufacturing sector could demonstrate a slight improvement.

GBP/USD: additional important levels

Overview
Today last price	1.2585
Today Daily Change	-0.0013
Today Daily Change %	-0.10
Today daily open	1.2598

Trends
Daily SMA20	1.2643
Daily SMA50	1.2677
Daily SMA100	1.2513
Daily SMA200	1.2566

Levels
Previous Daily High	1.263
Previous Daily Low	1.2584
Previous Weekly High	1.2688
Previous Weekly Low	1.2536
Previous Monthly High	1.2786
Previous Monthly Low	1.2597
Daily Fibonacci 38.2%	1.2601
Daily Fibonacci 61.8%	1.2612
Daily Pivot Point S1	1.2578
Daily Pivot Point S2	1.2558
Daily Pivot Point S3	1.2532
Daily Pivot Point R1	1.2624
Daily Pivot Point R2	1.265
Daily Pivot Point R3	1.267

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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