GBP/USD retreats below 1.3900, US and UK PMI hold the key
- GBP/USD pauses the previous session’s gain on Monday in the Asian session.
- US Dollar Index remains quiet near the 92.00 mark.
- The sterling gains on the hope that the BOE could be less dovish further due to a steady decline in coronavirus infections.
After testing a one-month high in the previous week, GBP/USD remains muted in the Asian trading session on Monday. The pair seems to be exhaustive near the 1.4000 mark but remained elevated.
At the time of writing, GBP/USD is trading at 1.3895 down 0.05% for the day.
The US Dollar Index (DXY), which tracks the greenback performance against its six major rivals, trades above 92.00 and gains some traction in the Asian trading hour, after it hit a one month low in the past week.
The mixed sentiment on upbeat US data and the dovish Fed took a toll on the USD valuation. The US Personal Consumption Expenditure Index (PCE) jumped 0.4% in June, below the market expectations of 0.6%.
Meanwhile, the US Senators finalized a sweeping $1-trillion bipartisan plan to invest in infrastructure, as some anticipating that the Senate could pass this week the largest public works legislation in decades.
On the other hand, the sterling gains after reports showed a steady decline in the new coronavirus infection.
Meantime, the EU pauses legal action against the UK over the Northern Ireland (NI) protocol in the previous week.
As for now, investors await the UK Markit Manufacturing Purchase Managers Index (PMI), US ISM MAnufacturing PMI to take fresh trading impetus.
GBP/USD additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
