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The GBP/USD pair falls for the second successive day, as sellers hold 1.2200, alongside a risk-on impulse. Broad US dollar strength keeps the American currency afloat against most G10 currencies.
Fed officials hawkish comments boosted the dollar and constituted a headwind for the GBP/USD pair. The Bank of England (BoE) is expected to hike rates on the August 4 interest rate decision. The British pound losses ground and falls during Wednesday’s US session by almost 0.26%.
Higher US Treasury yields benefited from the hawkish comments by Fed officials, and an improvement in sentiment are headwinds for the GBP/USD. The GBP/USD pair is trading at 1.22 down after hitting a daily high at 1.2207, just above the 50-day EMA, but buyers are unable to hold, left the major exposed to selling pressure, so the GBP/USD dived towards a daily low at 1.2100.
European and US equities trade in the green territory. US data from the Institute for Supply Management revealed that July Non-Manufacturing activity, also known as Services PMI, exceeded expectations, rose by 56.7, versus estimations of 53.5, and higher than June’s 55.9. Data showed consumers shifting from goods to services, as the US ISM Manufacturing report depicted signs of slowing down.
On the United Kingdom, final S&P Global Services and Composite PMIs for July. The former fell to 52.6 versus 53.3 estimated, while the latter slid to 52.1 versus 52.8 preliminary. UK’s stagflation fears keep rising while GBP/USD traders prepare for Thursday’s Bank of England (BoE) monetary policy decision, where the “old lady” is expected to raise rates by 50 bps to 1.75%.
The UK economic docket will feature the BoE monetary policy decision alongside the S&P Global Construction PMI.
