GBP/USD inches closer to 1.3800 amid weaker USD, Brexit headlines

GBP/USD remains firm on the first trading day of the week in the early European session. The pair managed to gather momentum following the previous two session’s fall-off . At the time of writing, GBP/USD is trading at 1.3780, up 0.19% for the day.

The sterling keeps its foot firmly against the majors amidst the expectations that the Bank of England (BOE) will be probably the first major central bank to raise interest rates in the post-pandemic cycle but economists warned that markets are already pricing the early rate hikes.

The Brexit-led optimism uplifts the sentiment surrounding the sterling, in light of the positive comments from the UK government on the Northern Ireland (NI) protocol. Meanwhile, the IHS Markit/CIPS UK Composite PMI jumped to 56.8 in October, beating the market expectations of 54.0.
 
The greenback edges lower on Monday, following the Fed Chair Jerome Powell’s comment that the US central bank is ready to start tapering but remained tight-lipped on the timeline to raise interest rate hikes. Investors took remarks as a signal that the other major central banks may hike rates sooner than the Fed.
 
As for now, traders keep their focus on the Bank of England’s(BoE) Tenreyro's speech to gauge market sentiment.

GBP/USD technical levels