- GBP / USD is moving higher during the European session on Monday.
- The US dollar remains subdued after lower US Treasury yields and reduced inflation fears.
- Upbeat data, Brexit news and an upbeat BoE fuel sterling gains.
The GBP/USD stands firm at the start of the European session on Monday. The pair has managed to gain momentum to the upside after falling the last two days. At the time of writing, GBP / USD is trading at 1.3788, up 0.24% on the day.
The pound sterling holds firm amid the expectations that the Bank of England (BoOE) will likely be the first major central bank to raise interest rates in the post-pandemic cycle.
Brexit-led optimism elevates sentiment around the British pound, in light of the positive comments from the UK government on the Northern Ireland protocol. Meanwhile, the UK IHS Markit / CIPS composite PMI rose to 56.8 in October, beating market expectations of 54.0.
Secondly, USD moves defensive on Monday, after Fed Chairman Jerome Powell’s comment that the US central bank is ready to start cutting bond purchases, but remained firm on the schedule to increase interest rate hikes. Investors have seen it as a sign that the other big central banks may raise rates before the Fed.
For now, traders are keeping their attention on the Bank of England’s Tenreyro speech to gauge market sentiment.
GBP / USD technical levels
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