GBP/USD posts modest losses above the mid-1.2600s ahead of US ADP report

GBP/USD clings to mild losses near 1.2665 on the firmer USD.
Richmond Fed Barkin said the potential for additional rate hikes remains on the table.
The fear of recession in the UK economy weighs on the British pound (GBP).
Investors await the UK Composite PMI and the US ADP Employment Change.

Lallalit Srijandorn FXStreet

The GBP/USD pair posts modest losses during the early Asian session on Thursday. The recovery of the US Dollar (USD) and US Treasury bond yields exerts some selling pressure on the pair. At the press time, GBP/USD is trading at 1.2665, up 0.01% on the day. Meanwhile, the US Dollar Index (DXY) surges to 102.45, the highest in three weeks.

On Wednesday, the US ISM Manufacturing PMI arrived at 47.4 versus 46.7 prior, better than the expectation of 47.1. Additionally, the labour market gauge of JOLTs Job Openings came in weaker than the estimation of 8.79M in November.

The minutes of the FOMC meeting in December indicated that participants believe the policy rate to be at or near its peak for this tightening cycle, while they cautioned that the exact policy path would depend on how the economy evolves. Richmond Fed President Thomas Barkin said earlier Wednesday that interest rate hikes remain on the table despite the progress in inflation control. This, in turn, lifts the Greenback against its rivals and acts as a headwind for the GBP/USD pair.

On the other hand, the fear of recession and a weakened manufacturing sector in the UK economy have diminished the appeal of the British pound (GBP). S&P Global revealed on Tuesday that Manufacturing PMI eased to 46.2 in December from the previous reading of 46.4.

Looking ahead, market players will keep an eye on the UK S&P Global/CIPS Composite PMI and Services PMI for December. Also, the US ADP Employment Change, weekly Initial Jobless Claims will be released on Thursday.

GBP/USD

Overview
Today last price	1.2666
Today Daily Change	0.0048
Today Daily Change %	0.38
Today daily open	1.2618

Trends
Daily SMA20	1.2667
Daily SMA50	1.2509
Daily SMA100	1.2449
Daily SMA200	1.2533

Levels
Previous Daily High	1.276
Previous Daily Low	1.2611
Previous Weekly High	1.2828
Previous Weekly Low	1.2685
Previous Monthly High	1.2828
Previous Monthly Low	1.2501
Daily Fibonacci 38.2%	1.2668
Daily Fibonacci 61.8%	1.2703
Daily Pivot Point S1	1.2566
Daily Pivot Point S2	1.2514
Daily Pivot Point S3	1.2417
Daily Pivot Point R1	1.2715
Daily Pivot Point R2	1.2812
Daily Pivot Point R3	1.2864

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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