GBP/USD prints fresh 2-year lows below 1.1500 as US dollar soars

US dollar strengthens following ISM Manufacturing PMI, ahead of NFP.
GBP/USD drops for the fifth consecutive day.
The multi-decade low waits at 1.1409 (March 2020).

Matías Salord FXStreet

A stronger US Dollar pushed GBP/USD to levels under 1.1500 for the first time since March 2020. The greenback is rising sharply following upbeat US economic data, amid risk aversion and higher yields. The pair bottomed at 1.1497 and then rebounded toward 1.1550, trimming losses.

The US Dollar Index is at the highest level since 2002, up 1% for the day. The dollar was trading in positive ground and rose further following the US ISM Manufacturing August report that showed better-than-expected numbers, including a recovery in the employment index and a slowdown in prices. Earlier, the weekly jobless claims report also came in above expectations. Attention now turns to the Non-farm payrolls report to be released on Friday.

The economic figures weighed on the demand for Treasuries sending US yields further to the upside. The US 10-year yield stands at 3.28%, a level last seen in June.

The last leg to the downside in GBP/USD was driven by the rally of the dollar across the board. Cable is falling for the fifth consecutive day on Thursday headed toward the lowest weekly close since 1985.

Despite showing some signs of stabilization, like a retreat in EUR/GBP, the pound remains among the weakest currencies of the G10 affected by the deteriorating outlook for the UK economy. Also market participants show concerns about the next prime minister. Liz Truss is holding the lead in the polls over Rishi Sunak. The winner of the Tory will be announced on Monday and will succeed PM Boris Johnson.

Despite the turmoil, there are still expectations of a 75 basis points rate hike from the Bank of England in September to curb inflation that, according to some a Goldman Sachs reports could reach 22% next year.

Technical levels

GBP/USD

Overview
Today last price	1.154
Today Daily Change	-0.0082
Today Daily Change %	-0.71
Today daily open	1.1622

Trends
Daily SMA20	1.1942
Daily SMA50	1.2013
Daily SMA100	1.2264
Daily SMA200	1.2809

Levels
Previous Daily High	1.1694
Previous Daily Low	1.1599
Previous Weekly High	1.19
Previous Weekly Low	1.1717
Previous Monthly High	1.2294
Previous Monthly Low	1.1599
Daily Fibonacci 38.2%	1.1635
Daily Fibonacci 61.8%	1.1658
Daily Pivot Point S1	1.1583
Daily Pivot Point S2	1.1543
Daily Pivot Point S3	1.1488
Daily Pivot Point R1	1.1678
Daily Pivot Point R2	1.1733
Daily Pivot Point R3	1.1773

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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