GBP/USD stretches higher, approaching 1.3800 with the US Dollar at long-term lows

The Pound appreciates further and hits fresh 4-year highs near 1.3800.
UK Manufacturing PMI remained unchanged, but employment output and new orders dropped.
US debt fears and Trump's attacks on the Fed are hurting the US Dollar.

Guillermo Alcala FXStreet

The Pound is accelerating its uptrend on Tuesday, unaffected by rather downbeat UK manufacturing PMI data. US Dollar weakness is driving markets today with tariff uncertainty, renewed concerns about the US fiscal health, and rising bets on Fed cuts crushing demand for the US Dollar.

UK manufacturing activity has remained steady at 47.7 in June, but new orders, employmen,t and output declined from the previous month and pointing to further contraction in the coming months.

US debt, hopes of Fed cuts are hammering the USD

These figures, however, have failed to curb Sterling’s rally. The GBP/USD appreciates nearly 0.4% so far today after having reached its highest levels since October 2021, at 1.3790.

In the US, mounting concerns about the impact of Trump’s “Big, beautiful bill” on the country's fiscal health are weighing on the USD as the bill goes through a lengthy voting process in the Senate.

Beyond that, Trump continued attacking Fed Chair Powell, calling for much lower interest rates and boosting hopes that the bank will ease its monetary policy between two and three times in the second half of the year. Later today, Powell will speak at a central bankers' summit in Sintra and might provide further insight into the bank´s monetary policy plans.

GBP/USD: Major resistance is at 1.3800 - UOB Group

The FX Strategy team at the UOB group sees the GBP/USD in a bullish trend, with major technical resistance at 1.3800: “We turned positive on GBP last Thursday. On Friday, we highlighted that 'the outlook for GBP remains positive, but it may consolidate for a couple of days first; the next technical objective is 1.3800.' We will maintain this view as long as the ‘strong support’ at 1.3645 (level previously at 1.3610) is not breached."
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Economic Indicator

S&P Global Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for GBP.

AUD/USD stays defensive below 0.7150 after Chinese data

AUD/USD remains on the back foot below 0.7150 in the Asian session on Tuesday, close to an over three-week low touched the previous day. US bond yields hold near multi-year highs ahead of the FOMC meeting and oil-driven inflation risks, supporting the US Dollar and weighing on the currency pair. Mixed Chinese activity data for August also fail to inspire the Aussie.

USD/JPY extends gains toward 155.00 amid USD resurgence

USD/JPY keeps pushing higher toward 155.00 early Tuesday, looking for more upside, as traders await the FOMC and BoJ meetings this week. Meanwhile, Fed rate-hike bets and oil-driven inflation risks keep US bond yields near multi-year highs, supporting the US Dollar and the pair. That said, a more hawkish repricing of the BoJ normalization path might continue to underpin the Japanese Yen and could limit USD/JPY's upside. .

Gold drops further; focus remains on $4,250

Gold adds to Monday’s pessimism and revisits the $4,260 region per troy ounce on Tuesday. The yellow metal’s extra weakness follows another positive day in the US Dollar, mixed US Treasury yields and steady pre-Fed caution.

Dogecoin clings to EMA support as recovery lacks conviction

Dogecoin (DOGE) hovers around $0.083 at the time of writing on Tuesday after finding support around the key support zone the previous day. Quiet institutional demand, along with mixed derivatives positioning, suggests fading interest in the dog-themed meme coin.

Markets slide as FOMC approaches

The US Dollar remains strong as markets turn increasingly cautious ahead of the FOMC. Stocks are tumbling, while Gold and Silver are moving lower under pressure from the stronger Dollar. The Japanese Yen is weaker again, while Crypto is correcting. BTC is approaching a key technical test and could fall below its 50-week moving average, while ETH remains above $2,405.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.