GBP/USD hovers around 1.2530 after paring gains, focus on US ISM Manufacturing PMI

GBP/USD remains in the positive territory after trimming daily gains on Monday.
US ISM Manufacturing PMI is expected to improve to 48.4 in March, from 47.8 prior.
GBP could face a struggle due to the speculation of the BoE initiating three quarter-point rate cuts in 2024.

Akhtar Faruqui FXStreet

GBP/USD trims intraday gains, remaining higher around 1.2530 during the Asian hours on Monday. US Dollar (USD) recovers its daily losses on risk aversion ahead of ISM Manufacturing Purchasing Managers Index (PMI) data from the United States (US) scheduled to be released later in the North American session, capping the advance of the GBP/USD pair.

However, the US Dollar Index (DXY) encountered difficulties following dovish comments from Federal Reserve (Fed) Chairman Jerome Powell on Friday. Powell remarked that recent US inflation data was in line with expectations, supporting the Fed's position on potential interest rate cuts throughout 2024. Fed officials maintain projections of three rate cuts this year. Market participants anticipate the first of these cuts to materialize at the June meeting.

In February, US Core Personal Consumption Expenditures (PCE) increased by 0.3% month-over-month (MoM), aligning with market expectations and slightly lower than January's 0.5%. The annual index rose by 2.8%, meeting expectations and slightly lower than the previous increase of 2.9%. US Headline PCE (MoM) saw a 0.3% increase, slightly below expectations and lower than the previous month's 0.4% rise. Year-over-year PCE increased by 2.5%, meeting expectations.

On the other side, the anticipation of the Bank of England (BoE) initiating three quarter-point rate reductions in 2024 is putting pressure on the Pound Sterling (GBP). This pressure is further compounded by recent weaker economic data, indicating that the UK economy slipped into recession in the latter half of 2023. BoE Governor Andrew Bailey's statement suggesting that interest rate cuts will be considered in future policy meetings has added to this pressure.

With limited high-impact data forthcoming from the United Kingdom (UK), traders are likely to gauge the UK economic landscape by closely monitoring indicators such as Nationwide Housing Prices, S&P Global PMI, and Halifax House Prices data set to be released during the week.

GBP/USD

Overview
Today last price	1.263
Today Daily Change	0.0005
Today Daily Change %	0.04
Today daily open	1.2625

Trends
Daily SMA20	1.2717
Daily SMA50	1.2676
Daily SMA100	1.2657
Daily SMA200	1.259

Levels
Previous Daily High	1.2645
Previous Daily Low	1.261
Previous Weekly High	1.2668
Previous Weekly Low	1.2586
Previous Monthly High	1.2894
Previous Monthly Low	1.2575
Daily Fibonacci 38.2%	1.2632
Daily Fibonacci 61.8%	1.2624
Daily Pivot Point S1	1.2608
Daily Pivot Point S2	1.2592
Daily Pivot Point S3	1.2573
Daily Pivot Point R1	1.2643
Daily Pivot Point R2	1.2662
Daily Pivot Point R3	1.2679

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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