- A weaker US dollar continues to support GBP / USD.
- The pound recovered 1.3900, improving the short-term technical outlook.
The GBP/USD it rose even higher during the US session, driven by a general decline in the US dollar. The pair reached 1.3931, the highest intraday level before retreating towards 1.3900. The pound remains above 1.3900, erasing most of Friday’s losses.
The bullish move took place as the DXY fell, dropping below 91.00 amid a drop in US yields and risk appetite. The Dow Jones is up 0.83% and the S & P500 up 0.35%, while the Nasdaq is down 0.42%.
Economic reports and the BoE
Looking at economic data, the ISM Manufacturing index in April unexpectedly fell to 60.7, weakening the US dollar. After Monday’s data, the relevant reports in the US are ADP’s private payroll on Wednesdays and the official employment report on Friday.
In the UK, the key event will be the meeting of the Bank of England. The decision and statement are due Thursday. BBH analysts expect the central bank to hold firm. “Rates are expected to remain stable, but the bank may begin to reduce its asset purchases. At the last meeting on March 18, the BOE did not seem overly concerned about rising government bond yields, noting then that “an aggregate measure of UK financial conditions has remained virtually unchanged since February report “. “Since then UK yields have remained largely unchanged so concern probably remains low. GBP tends to strengthen on BOE decision days.”
Technical levels
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