- GBP/USD reversed its direction in the second half of the day.
- US Dollar Index rises above 92.50 on Tuesday.
- Risk-averse market environment is helping USD find demand.
After edging higher toward 1.3900 during the European session, the GBP/USD pair came under renewed bearish pressure in the second half of the day and was last seen losing 0.26% at 1.3809.
DXY capitalizes on risk-off flows
The renewed USD strength in the American session seems to be weighing on GBP/USD. The negative shift witnessed in the market mood is helping the USD find demand as a safe haven. Currently, the US Dollar Index (DXY) is up 0.3% at 92.52. Reflecting the risk-averse environment, the Dow Jones Industrial Average and the S&P 500 indexes are down 1.3% and 0.75%, respectively.
Earlier in the day, the data published by the Institute for Supply Management (ISM) showed that the business activity in the US service sector continued to expand in June with the PMI arriving at 60.1. However, this reading came in weaker than May's print of 64 and missed the market expectation of 63.5.
On the other hand, the data from the UK revealed on Tuesday that the Markit Construction PMI improved to 66.3 in June from 64.2. Nevertheless, this data had little to no impact on the British pound's performance against its major rivals.
There won't be any data releases from the US in the remainder of the day and the USD's market valuation is likely to continue to impact GBP/USD's action.
Technical levels to watch for
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